gross receipts - schedule L

hi

For active traders -- what is the definition of Gross Receipts as asked below?

Schedule B - Schedules L, M-1 and M-2 Requirements
Does XXX llc satisfy all four of the following conditions?

1. The partnership's total receipts for the tax year were less than $250,000,

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Is it total gross of "$ Securities Sold - $ Securities bought"
or is it just "$ Securities Sold"?

 

https://www.law.cornell.edu/cfr/text/26/1.993-6

My uneducated guess is that the securities you are selling would be considered as being held primarily for sale so "$ Securities Sold". You should contact GreenTraderTax or some other tax organization to help you out.

 

Thanks sprstpd. I think u r correct. So over 250k -- Schedule L, M1 and M2 are required it seems.

 

It is just a guess and could be more nuanced. The IRS regulations are so hard to read and comprehend. For example, whether or not you have elected mark-to-market accounting could possibly affect how your sales are categorized. It is possible that your sales fall into the "gross income" category in which case you would only report your trades that were gains (and ignore the losses). You should really talk to someone who knows, just talking to someone probably costs very little.

 

My 2 cents, not legal or tax advice:

I assume you're referring to an S-corp, and schedule B, question 11. The instructions say:

Question 11
Total receipts is the sum of the following amounts.
• Gross receipts or sales (page 1, line 1a).
• All other income (page 1, lines 4 and 5).
• Income reported on Schedule K, lines 3a, 4, 5a, and 6.
• Income or net gain reported on Schedule K, lines 7, 8a, 9, and 10.
• Income or net gain reported on Form 8825, lines 2, 19, and 20a.​

Look at the 4th bullet above. That leads you to schedule D.

So, your net, not your gross $ sold.

Again, if I'm wrong, not my fault, don't listen to me. But if I'm right, then Yes, it'll be nice to not have to complete schedules L, M-1, and M-2 every effing year.

Edit: I just saw you wrote "partnership", so you've elected that instead. Same idea, sched B, question 4 leads to sched K which leads to sched D, thus net, not gross.

 

Thanks @TooEffingOld. appreciate your inputs. I am hoping there is someone on this forum who uses a partership for trading and can provide more precise guidance.

 

It also depends on which state you are in. In NY you have to complete those for NY State, so you pretty much have to for Federal taxes.