Jwishcamper Do most prop firms report losses on K-1's to their traders? It was my understanding that most keep the losses for themselves, so that the trader does not get to deduct losses. I may be mistaken. On a related subject, how are losses handled when the prop trader is treated like a independant contractor? Gains are reported on 1099misc, but losses can't be reported that way. Does that mean that the corp or llc gets the benefit of the losses, while the trader gets no write-off?