US income tax question
Howdy all:
Before I speak with an accountant, I would first like hear your comments and/or suggestions on this issue.
*US Income Taxes*
Having a background in equity trading within the US stock markets, I am familiar with the IRS codes and regulations pertaining to the status of traders, and investors. Typically speaking, the IRS views a "trader", as one who trades hundreds, or often times thousands of trades annually, and, who can prove that he/she relies on trading as their sole source of income. This "trader" status will allow one the ability to treat their trading as a business, offering numerous deductions and write-off capabilities, thus enhancing their overall net after tax income.
On the other hand, the IRS views an "investor" as just that, an investor. They have no business status or write-off capabilities in the eyes of the IRS. Myself personally, I have always fallen into this category as my trading typically never exceeded ten trades per month.
Since being introduced to the Forex markets, I have found that its not uncommon to make 10, sometimes even 20 round-trip trades per day in currency trades alone. Clearly, these numbers will easily allow one a "trader" status in the equity markets. But how does it apply to the spot FX & currency markets?
Any US traders who have experience with this topic are welcome to reply.
Thanks in advance!
flyer
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