Trader Status and AMT tax

Discussion in 'Taxes and Accounting' started by silk, Sep 6, 2010.

  1. silk


    I have elected Trader Status with Mark to Market election. I am carrying forard my Net operating Loss from 2008. My understanding is that Net Operating Loss from trading in securities should NOT generate Alternative Minimum Tax. However, Turbo Tax doesn't seem to know about this and when it asks me for my NOL from proceeding year, it triggers a AMT Tax because of the 90% threshold. Maybe I can just override it on Turbo Tax and proceed?
  2. the1


    Is there a chance you can cite a section of the code that states NOL carry-forward from the trading of securities does not trigger the AMT?

    If you are unaware of any section of the code that states this then it's time to do some research. Without rolling up my sleeves and logging into RIA it's my thinking that your carry-forward would correctly trigger the AMT.

    The question is: Does the fact that your NOL carry-forward, originating from the trading of securities, allow you to dodge the AMT?

    My thinking is no but it's worth looking into. Below is a link of Title 26 if you feel like digging through it. This is not the way to research a topic such as this but if you don't have access to something like RIA or CCH then you can give it your best shot.

    Perhaps an option to avoid the AMT is to Carry-Forward parts of your NOL to future years, thereby flying under the AMT's radar?