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-----Original Message-----
From: M. Simms [mailto:prosys@xxxxxxxxxxxxxxxx]
Sent: Thursday, January 10, 2002 2:46 PM
To: hpdahm@xxxxxxxxxxxxx
Subject: RE: Hurray Tax Time
re: "Optionally traders may elect to treat their gains and losses from
trading as ordinary income"
The default is therefore to have all gains as capital gains then ?
Why would one ever elect the above ?
This is ordinarily with the idea that losses will not be limited to
$3000.00. the pitfall to this however is that it is a permanent election
and you must receive permission from the Commissioner of the IRS before
changing back. That means when you become profitable your income will now
be ordinary rather than capital. If the trader does not become profitable
then he/she should probably seek a less expensive hobby.
There is in my opinion, almost never a good reason for an individual to make
this election.
Perry
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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