Fw: Trader Status for Tax Purposes

["Dan Tillemans" <dlt7@xxxxxxxxxxx>]

Dear Conrad, (or other RealTraders who have read Tessler),

I know that Tessler's book has been recommended before and would appreciate
hearing from anyone who has read his latest book.  After reading your
comments I became interested in purchasing Ted Tessler's book, "The Trader's
Tax Survival Guide", May, 1997, and was able to find it for $52 at Amazon:
http://www.amazon.com/exec/obidos/ASIN/0471179655/qid%3D919091779/002-331045
0-7592409

In reading the first book review on the list by a customer, however, I was
surprised by how this person interpreted what Tessler was saying,   "It
advocates that you try to qualify for Trader's Status...   All your expenses
become fully deductible under Schedule C, HOWEVER, you loose capital gain
treatment AND must pay Social Security and Medicare taxes on your Self
Employment income but you can set up a pension plan and/or SEP IRA..."

This appears to be in contradiction to how you have interpreted Tessler,
"Tessler has traders put profit/losses as capital
gains/l but says you can put expenses as business expenses not investing
expenses..."

Are you able to clarify this point any further for the list?  Maybe someone
else who has read Tessler could offer an interpretation?

Thanks for any comments.

Dan Tillemans


-----Original Message-----
From: cb <cpbow@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Monday, February 15, 1999 12:07 AM
Subject: Re: Trader Status for Tax Purposes


Tom Domingues wrote:
>
> See a discussion of the trader tax status issue in today's (Sunday 14
Feb.)
> Washington Post, "Thorny Tax Issue: Who is a 'Trader ?".
>
> It's at
http://washingtonpost.com/wp-srv/business/feed/biztop918999483517.htm
>
> Tom Domingues          "Make new mistakes."--Esther Dyson
> tdelta@xxxxxxxxx


There are some differences in that article vs. what's in Tessler's
book.  For ex., as I recall, Tessler has 3 categories: investor, trader,
and market-maker?.  Tessler has traders put profit/losses as capital
gains/l but says you can put expenses as business expenses not investing
expenses.  So losses would be limited to $3000 per yr. (w/excess rolled
over), but expenses could be deducted straight from any income.

  The article seems to say traders' p/l are regular income not capital.
Tessler says that only for market makers.  He also says mm's are the
only ones who would have to pay self-employment tax.  I can't remember
why they would and a trader would not.

This is my recollection from about 15 months ago, so it could be faulty
or outdated, and  in any case isn't at all from a tax expert!

Conrad Bowers