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In a message dated 98-03-20 13:34:14 EST, you write:
<< For BelAirCap: The key to the question of self-employment tax, as it is
for participation in retirement plans and deduction as a BUSINESS
expense of medical insurance premiums, is what the tax code calls
"earned income" - all these items depend upon the existence of "earned
income" and capital gains are expressly defined NOT to be earned income.
I would again refer all interested traders to Ted Tesser's book for
answers to questions in this area. >>
Unfortunately Tesser contradicts himself. That is because he also says that
"if you own or lease a trading seat on an exchange you will be subject to
self-employment taxes." Which seems to mean that he feels that if you trade
on-the-floor,in the pit, then you must pay self-employment tax, yet if you
trade off-the-floor then you don't have to pay the tax. This is the first
time I have heard about the "location of where the orders are generated" being
the determining factor of whether you are self-employed or not.
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