TTS Status

Discussion in 'Taxes and Accounting' started by VicBee, Jun 21, 2020.

  1. VicBee


    I've been roaming the web in search of definitive answers on what it takes to gain TTS status. At times is seems far more complex than what I do and others it seems to match my profile. None of that would be important if there weren't such tremendous tax advantages to having the TTS status. Although I don't expect a definitive validation either way here, your feedback in the direction of TTS would push me to pursue the status.

    I started trading April 29, 2020 with well over the amount that I have found on the web to qualify on that basis. Since then I've traded about 220 times which, if I continue at that pace to the end of the year, should take me close to the 720 minimum trades that seem to be a requirement. I don't have another job and spend at least 6 hours a day trading, 5 days a week.

    As far as I can tell, those are the requirements, but I'm not sure I can apply for the status in mid year for 2020. It doesn't really matter for this year but I would apply for the status in 2021, create a business and take this to the next level. Is there even an application for getting the status?

    Thanks for the feedback
  2. For me, it was better just to trade futures and futures options where I get 1256 treatment (60% long term/49% short term). I never have to worry about tax trader status.
  3. tiddlywinks


    de facto requirements...

    As mentioned in the above blurb, TTS is subjective... The IRS will look at the circumstances and situations of the taxpayer. This is why TTS is so difficult to define with 100% certainty. There is no form or application... you meet the requirements or you don't. And your thinking of what qualifies may be different than what the IRS thinks which is why previous court cases are used to determine qualification.

    Additionally, TTS is something that must be qualified each tax year. It is not a "permanent" status like MTM accounting which is valid until changed or revoked.
  4. VicBee


    I get the subjectivity. But filing taxes as a TTS is more complex than non TTS. Do I file as TTS and cross my fingers that it's accepted? And refile if it's rejected?
  5. tiddlywinks


    You have changed the topic.

    Seek professional tax preparation advice.
    You can start by picking up Greens Trader Tax Guide...
    Last edited: Jun 22, 2020
    VicBee likes this.