I would say that in the eye of the IRS you are not a trader, but a short term investor even if anything else applies. It doesn't matter what your trading vehicle is. But hey, your first audit will tell you for sure! I agree with Jack, $250 is worths it to sleep well....
absolutely and if you still worry about the 'day' in day trading bit , scalp 1 contract ym randomly for 5m each day should do it. just do what they ask in print and you will be fine.
I checked the greencompany website and found this: The IRC 475F2 election is the trader status. So that settles it, I would be better off filing as an investor.
You are confusing two different things. You can claim Trader status and not claim mark to market as a 1256 trader in order to deduct your expenses on schedule C. You are quoting something that says not to choose mark to market, it does not say don't choose trader status.
Mark-to-Market accounting: The new trader tax laws of 1997 are IRC Section 475(f); these allow Traders in Securities (475(f)(1)) and Traders in Commodities (475(f)(2) to elect mark-to-market accounting by April 15 of the current tax year (not after the year ends). The main effect of this new tax law is to convert capital gains and losses into ordinary gains and losses. so you say trader status but what you really mean is MM status. And evrybody else seems to understood what you mean except me, hm... more... http://www.fool.com/taxes/2000/taxes000609.htm
Ashan you have a number of things to consider - If you are currently young, healthy, and single you have probably not thought much about medical insurance. If you marry and have children, medical insurance might be nice unless your spouse has insurance or you are a VERY successful trader. You will not believe what maternity bills amount to. A tax-sheltered, deductible, retirement plan might be nice. These are only feasible/deductible through some "entity", not via trader status. None of these have to do with "trader" tax status. However, if you plan to trade for a living for a long time these things will become more important. But, if you just plan to trade for a few years they mean little. However, depending on how successful you are, you may trade until ready to retire. Again, go to Green or some other CPA type that specializes in traders and the trading business. Most CPA's don't have any idea what a 1256 contract is, what trader status is, etc., etc. You need to deal with a specialist. Jack