Tax Questions

[TEX]

You might consider linking to www.fairmark.com in your i-box; good source for traders...

For instance, on the benefit of being classified as a "trader" rather than an "investor":

"Tax Benefits
If you're a trader, you're likely to be able to claim more deductions than an investor. Some deductions that would be claimed as itemized deductions subject to various limits will be allowed as business deductions, without such limits. And there are some deductions traders can claim even though investors can't claim them at all.
In addition, traders are eligible to make the mark-to-market election. If you make this election, your trading losses won't be subject to the $3,000 capital loss limitation. This limitation can be very painful for a trader who has a bad year."

Also, traders who make the mark-to-market election get their gains treated as ordinary income. But it's too late to do that for this year's return--paperwork had to be filed *last* April. But anyone who qualifies could file this April, for next year's return.

But, filing as a trader if one is "borderline" has audit risks, and the definition of "trader" is not spelled out by the IRS...

Good pro/con discussion here:

http://www.fairmark.com/traders/

http://www.fairmark.com/traders/