Trading tax question

Discussion in 'Taxes and Accounting' started by huby, Nov 14, 2001.

  1. cocobop


    If one chooses to elect mark to market status does he still file a schedule D on his yearly taxes. Also would MTM status preclude you from being able to take advantage of previous tax loss carry forwards from prior years. Thanks for any help.

    Good trading
    #11     Nov 25, 2001
  2. ddefina


    3rd party software is the only way I know of to get the information organized correctly for your schedule D from IB. They support Quickbooks and Tradelog is another program I use that allows direct downloads straight into the Schedule D format. There are others but can't think of them. Try doing a search on this site as it's been discussed several times.
    #12     Nov 26, 2001
  3. Bob777


    Fo those of you that trade futures, do you pay self employment tax on commodities/futures trades?

    I'm getting conflicting information. One accountant said commodities trades are earned income and equities trades are investment income, so you must pay SE tax on the commodities trades. Another accountant says you only pay SE tax on commodities trades if you own or lease a seat on the exchange.
    Who is right?


    #13     Nov 26, 2001
  4. Bob777:

    DO NOT RELY ON THE FOLLOWING. It's just something for you to think about.

    But, VERY GENERALLY, one pays SE tax if one is a dealer. Otherwise, one's gain or loss is from the sale of a capital asset, and SE tax is never imposed on the sale of a capital asset. Get some competent advice.
    #14     Nov 26, 2001
  5. jsmith


    I didn't want to start a new thread for this question and
    I think it fits into this thread.

    I read that traders have the option to make the
    mark-to-market election. I'm wondering if you have to
    be a "securities trader" to make this election?
    Suppose you have a job and you trade part-time in
    the morning before work or at work :D . Could
    you be able to make the mark-to-market election or
    is it only available to full time traders?

    Also, if I was a full time trader. Could I deduct my new
    computer as business expenses? My guess is yes.

    How about this? Suppose I make 10k in the whole
    trading year. I should pay like 3k in taxes. If I
    did buy a computer for 3k for my trading business, does
    this mean they cancel out and I won't have to pay any taxes?
    #15     Dec 27, 2001
  6. ddefina


    No, they don't offset directly. You have to capitalize and then depreciate the computer over 5 years. But you could elect section 179 and write off the whole computer the first year up to your schedule C income + I believe your W-2 income, limited to around $22,000 per year. You better check with your accountant or get a copy of Turbotax to get the latest rules.
    #16     Dec 27, 2001
  7. no, you don't pay SE tax.
    #17     Dec 28, 2001