If the prop firm or equity trading firm (whatever they want to call themselves) declares all the losses for themselves (taking away your Sched. D) even though they come out of your security deposit, how at the end of the year if you have shown a loss on paper can you file a Form C on the 1040? You acted as a business, you have a contract with the company, you did everything a normal business would do, but you really have no income to show. Not sure if you have a business and don't show income if you can really file a Sched C. It feels like the IRS would be all over it. Any helpful replies would be appreciated. Thank you.