Thank you JEB9999. As you can guess, i have been doing some reading on this. Directly from IRS.GOV, Topic 429: "Gains and losses from selling securities from being a trader are not subject to self-employment tax". Only difference is: if you opt to "Mark to market" (which is applicable to futures, because there it is mandatory to M2M), then you report the capital gains on schedule C if not then reported on Schedule D. To my understanding so far, the gain of traders trading for their own account is taxed as capital gains and not as ordinary income whether or not you M2M. So, i am seriously looking into NYmex membership and lease etc. It is a substantial expense. $2000 application fee and $1100 per month for the seat. I have also been looking into other brokers. Any opinions on Introducing brokers Vs. FCMs? Who should one go with? May be I will learn to use a platform other than IB's for a saving of several thousand dollars. Thanks every one.
Thanks Bones. Just one thing I came across in my reading. From you last post, it sound like you may be itemizing your trading expenses. As a "Trader" you can take the expenses on Schedule C (business form) even though the capital gains are filed on the Schedule D or form 6781. Thanks.
Deal directly with a major Chicago FCM for your best deal. Introducing Broker would be useless - they just take a vig haircut and give-up to a Chicago FCM anyways. Never take anything about taxes on an internet forum at face value - go to a CPA who has credentials and references in the field of regulated futures.
Hello Bone, Do you mind telling me which broker might give $1.10 round trip for member commissions, because i have checked around. The member rate of Nymex exchange fee for CL per side is 0.70 + 4 C in NFA fee. That by itself comes to $1.48 per round turn. Am I missing something? Thanks.