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* ? Has anyone used Robert Green?
CPA's are not known for their "Carnival Hawking" demeanor and therefore I
always get nervous when they make H&R Block type claims about how much money
they can get you back over XYZ tax services.
Each and everyone of you is an individual with individual problems,
opportunities and most importantly at tax time, circumstances. These
circumstances must be looked at individually rather than as a herd of
cattle.
Someone said they were using an Excel log for trades, and folks that will
work just fine, the important point is keep good records of every trade!
Keep this record in case you get a letter or are audited, but unofficially
the IRS has said that a summary will suffice for the tax return. If you
trade futures you just get a 1099B that gives the net profit or loss from
trading, if you trade equities the broker gives you a detailed statement for
a 1099. In either case check the 1099 against your own records, brokers
have been notorious for being wrong in the past.
For Trader Status you pretty much need to meet these requirements:
1. Trade for your personal account
2. Make your living off of trading - you can't hold a full time job or own
and operate another business and maintain trader status.
3. Trade to take advantage of market swings - short term trades. This makes
it much easier for futures traders and day traders of equities.
4. You trade based upon technical (analysis) factors rather than
fundamental.
Tax reporting of investment activity:
1. Dealers treat all gains and losses from trading as ordinary income (loss)
on Schedule C. Dealers expenses are business expenses and also reported on
Schedule C. Dealers are required to us Marked-to-Market accounting for
trades and their income is subject to Self-Employment Tax.
2. Traders generally treat all gains and losses on Schedule D, while their
trading expenses are reported on Schedule C. Optionally traders may elect
to treat their gains and losses from trading as ordinary income.
3. Investors report their gains and losses from investing on Schedule D and
expenses are reported on Schedule A subject to the 2% AGI Threshold and also
subject to the Schedule A phase-out.
Please let me know if I can answer individual questions or be of any help to
you.
Thanks,
Perry Dahm
Futures on Stocks Central
H. Perry Dahm, CPA, CTA
mailto:hpdahm@xxxxxxxxxxxxx
300 Esplanade Drive, 9th Floor
Oxnard, CA 93030
805-981-3928
800-350-8744
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