1

Suppose I have enough trades and meet the requirements to qualify for Trader Tax Status with the IRS. (If I trade in the morning, trading 4 days a week, 15 trades a week, 720 a year, plus any requirement except that I also have a full time salary).

If I have full time job would that nullify my ability to claim TTS with the IRS?

2

The criteria that you listed meet some of the requirements for Trader Tax Status. However, there are other requirements which you haven't addressed:

  • Was your average holding period 31 days or less?
  • Did you trade millions of dollars a year in equities
  • Is your account size significant or are you trading low priced options?
  • Were there any lapses in your trading or did you trade consistently as a business operation?

TTS provides many tax breaks as well as MTM accounting which eliminates the wash sale violation so if you meet the criteria, file for it. The worst that the IRS can say is no.

-1

One trader-status guideline calls for working four hours per business day or more on the trading business.

Well anyway, I'm not impressed until I see the dollar amount of the home-office deduction.

Also consider that the default method of over-the-counter Forex trading already takes unlimited trading losses against overall income. But who needs that trader-status feature ? I suppose someone who worries that they might lose a large amount of money, then give-up, and then too-slowly benefit from a capital-loss carryover.

Finally, the 1099-B now mostly automates the wash-sale accounting. So the simpler accounting method of trader-status might not be needed.

In any case, don't forget that for those in high tax brackets that futures trading takes short-term trading to lower tax brackets. Also, futures trading, without the itemization of trader-status accounting, is the simplest accounting of all.

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