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Has anyone had good or bad experiences with claiming trader status
(i.e., calling the trading a business).
Besides being employed fulltime in a scientific field, I am a small
futures trader, end-of-day but fairly short holding times (1-4 weeks on
average?). I spend a lot of time on it, and have done some system work
on Trade Station. I've spent far too much on books, subscriptions,
etc. I lost a good bit of money in 1996, although I've probably
recouped 2/3 of that this year. After reading Ted Tessler's book I
think I might be able to consider it a business. The advantages, as I
understand them:
I could deduct all expenses, even commissions this year, even though I
don't have capital gains, without any limits, against my other income.
I would, however, be limited to the amount of the capital losses I could
deduct to the usual amount.
I probably could deduct NOW, my computer (which I use exclusively for
trading), and something for the room in which I work on trading.
Am I correct in my belief that commissions are deductible only for a
trading business ("trader") and not for an investor? Does anyone know
if the amount listed on the 1099 for futures P/L includes commissions?
I would not be deducting anything* I wouldn't eventually be able to
deduct against capital gains later (assuming I had some). But, because
of very tight finances now, it would be a great advantage to me to
deduct them this year instead of having to wait. So I'm inclined to try
the trader status. (*except commissions?)
Any input? (I need to do this by Aug. 15.) Shortly before Apr 15, when
I went to the local IRS office, they looked at me like I was a Martian
when I asked about futures trading, so I don't think I can get help
locally! Thanks!!
Conrad Bowers
cpbow@xxxxxxxxxxxxx
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