Trader tax status question

Discussion in 'Taxes and Accounting' started by nravo, Dec 26, 2007.

  1. nravo


    If I have a joint account with my wife, must we both claim trader status to have the P/L from that account treated as a trading business? And if so, is incorporation away around this, or would her employment continue to be a barrier?
  2. As long as your wife is not making an occassional trade nor investments in the joint account while you are actively trading it...

    Nor are funds leaving the account and being transfered to a bank account solely in her name...

    It won't cause problems for your (as in you...not your wife) trade status qualification.

    Worst come to worst, you'll get audit (not likely) and you'll have to prove your spouse had no impact on your trade decisions.

    For example...she's not home (at work) while you trade or the account is not connected to anything else that's solely in her name.

    Next, before you make that next trade in 2008...

    Get your own account or remove your wife off the account.

    By the way, get a tax accountant that's familiar with traders and it will be money well spent...

    Along with calling the IRS to request someone that's familiar with Traders.

    Merry XMAS and Happy New Year

    Disclaimer: I'm no tax accountant.

    Therefore, you need to take my advice with a grain of salt.

  3. nravo


    So trades made in a joint account can be classified for tax purposes as being made by one spouse as part of their business? Seems generous.
  4. Surdo


    Ask a CPA, the last response was an educated GUESS, at best!

    Actually calling the IRS is not a bad idea.

    el surdo