No. The ONLY time you are a non-professional is if you are : (a) A natural person - AND - (b) Not employed/contracted/working in the financial sector If you do not meet BOTH criteria, then you are a "professional". Simple.
Yes, this is the confusing part to me about IB's website. If I am filing a Schedule C for a sole proprietorship, and Schedule C is a form for "Profit or Loss from Business", doesn't that mean that a sole proprietorship should pay "professional" fees (based on this bullet point)? However, the exchange definitions seem to imply otherwise.
Sorry, I obviously did not understand your first post. Thanks for the clarification. Okay, so if I am an individual trader, not associated with any financial institution, and not incorporated, then I would be deemed a "non-professional". Correct?
That's my understanding of it, yes. The term "professional" is perhaps unfortunate and confusing in certain circumstances, but its hard to find an alternative term ! But as always, if in doubt, get a lawyer to read the agreement for you.
So here is where the confusion lies in my mind. Unless I am mistaken, Robert Morse is implying that sole proprietors are non-professionals. If you are correct, than anyone who claims trader tax status must pay for professional data fees. So who is correct? I have read instructions on different websites which could be interpreted both ways.
When you say sole proprietor, what do you mean? If you open an individual account that's not a sole proprietorship. If you create a DBA, that is tricky as it is not an entity but has an EIN.
By the way, one definition of a sole proprietor is: A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one natural person and in which there is no legal distinction between the owner and the business.
I am talking about opening an account under an individual name using the individual's social security number. All the broker sees is an individual account. However, for tax reporting purposes, that individual claims MTM, has trader tax status, and files business expenses using Schedule C.
@sprstpd Look, I don't know how I can make it any more simple ! A "natural person" is just that ! Its a human being, its got a heart, lungs and all the rest of the things a "natural person" has. Dress it up however you like, but a "sole proprietorship" is a business, it is NOT a "natural person". It may not be a full blown "legal entity" but it is not a "natural person", it is a form of business organisation ! Anyway, coming back to the original question at the top of this thread, the OP said quite clearly that they were thinking about "incorporating", and that very much is not a "natural person".