I have been trading for two years and have moved into it full time due to increased success. I've thrown myself completely into it now I've quite my job and I trade many times a day every trading day. This is how I'm going to make my living no doubts, ifs, ands or buts about it. I need straight answers on who has legit IRS trader status and what it entailed to get it. Thanks M
I'm not sure what you mean by "legit" IRS trader status. I assume you mean TTS and mark to market treatment. I suggest you check out this website. https://greentradertax.com/ Lightspeed Financial Services Group LLC. is not affiliated with this service providers. Data, information, and material (“content”) is provided for informational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities. Any investment decisions made by the user through the use of such content is solely based on the user’s independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services provided and any service used to execute any trading strategies are solely based on the independent analysis of the user.
Consult an accountant with lots of experience in getting trader status. Read that it was way harder than you think to qualify as a trader status with the IRS. This is where you will have to spend monies to get professional help.
That is what I've heard too, among other things. That's why I asked to get actually frank, succinct answers from someone that has done it because I've heard a lot of different things. Probably the best way to go about it. I'll do that here soon instead of beating around the bush.
I look at it every few years and here were my conclusions: you can elect for trader status with mtm or without. I chose without because it fit my personal profile better. There are court cases that have set precedent as to who qualifies. It’s not enough that trading is your primary source of income. If you are fulltime it’s probably best to get an accountant - it doesn’t have to be green. It should be someone who can stay on top of the rules for you.
How old are you? Do you have other assets to “protect” in case of blow up? Do you have/want social security? Medical? Is it your only income stream? It’s a tough business, as you know, so I think thinking out worst-case scenarios is worth doing. That should help make the decision.
Legit-conforming to the rules; legal. What exactly did they have to go through, rules, process, time, expense, how long from start to finish, just the overall difficulty of the whole endeavor. Of course it sounds like it should be a simple process, i.e. so many trades a day, consistency, etc, but from my experience it never is when Beauacracy is involved.
Early 30s, I have assets but nothing major, and frankly I've already experienced the worst at the beginning and came out from it and triumphed. I still have other skill sets and have no problem putting them back to use. I don't want nor expect a single thing from the government, except of course the ability to be able to trade as successfully as possible and the advantage of eventually trading under my own S corp/LLC. It is a very tough game, which is why I've spent two years every single day refining my skills, process and most importantly my mindset and emotions. The fact I've committed 100% usually expedites any process when one seeks to accomplish something. I've tasted both success and failure, but now have a very risk managed approach to trading. Yolos, massive positions, holding things long term in the hope they blow up aren't how I trade. No doubt it's probably the hardest and most emotionally turbulent thing I've ever done, and I have had a wild life to say the least. It's definitely something I wouldn't tell someone to try unless they wanted to do it properly, but I did it, I've done it, and now it's time to look to the future. All I really wanted to know is, how hard was it, how long did it take, what roadblocks did you encounter. Seems to me as long as you're trading (daytrading) very frequently, and making money that should be all there is to it, but nothing is ever so simple in this situation. Thanks
In your case, buy Greens guide, today! No excuse is acceptable. https://greencompany.com/product/greens-2022-trader-tax-guide-online-access/ Only a tax accountant and/or tax attorney versed in the field of trading can answer specific questions for your specific circumstances, situations, and interests. Meanwhile, you haven't mentioned if you qualify or expect to qualify for TTS! Without qualifying for TTS (or having exchange membership), the conversation regarding trading-business taxation including MTM ends right here.