There is quite some info available regarding trader status and mark to market etc for an individual. But what about a company ? When a company is trading actively (obviously falling into the Pattern Day Trading), how much tax will it pay on gains ? Is it as important to a company to claim mark to market as it is important for an individual trader ? Will the gain be declared as capital gains or ordinary income ? tntneo
MTM accounting transforms cap gains/losses into ordinary income/losses regardless of form (e.g. sole proprietorship, LLC, S-Corp, LP), AFAIK. Also, again AFAIK, a legal entity can elect MTM accounting as soon as it is formed (i.e. it is not limited to the 1/1-4/15 window period).
thanks, indeed I see confirmation and useful information on these sites : http://www.fairmark.com/traders/index.htm http://www.irs.gov/formspubs/display/0,,i1=50&genericId=12278,00.html http://www.irs.gov/formspubs/display/0,,i1=50&genericId=11277,00.html mark to market it is. an entity (LLC or C-Corp) is a good idea to (much easier to deduct expenses for traders and justify 'trading as a biz'). tntneo