Does the IRS consider you a professional "trader in securities or commodities" or an investor?

As a result of the Taxpayer Relief Act of 1997, a "trader in securities" qualifies as a trade or business that is eligible for tax breaks and 100% deduction of legitimate business expenses. A trader can also use trading losses to offset an unlimited amount of income. Therefore, it is important to determine whether your trading actually qualifies you as a "trader" or an investor. The tax laws applicable to professional traders are very specific and complex. The objective of our tax service is to assist the trader to qualify for beneficial treatment under the guidelines and reduce tax liability.

Important Issues for Professional Traders:

1. Do you know what constitutes a trader in securities as opposed to an investor?
2. Do you know which business entity is best suited to your specific circumstances for your trading business?
3. Do you know the tax benefits and liabilities of the mark-to-market election?
4. Do you know the specifics of the IRS wash sale rules?
5. Do you know what the IRS requires for a trader to hold long-term investments?
6. Do you know what the IRS requires if long-term investments were converted into trading securities to begin the trading business under the mark-to-market election?
7. Do you know when or if you need to file Form 3115 to Document "Accounting-Method Change"?
8. Are you familiar with the different rules for calculation of franchise tax under the mark-to-market rules?
9. Do you qualify for an office in the home deduction?
10. Are you familiar with the estimated tax deposit requirements?

If you were unsure about the answer to even one of the above questions, it would be to your benefit to consult a CPA specializing in this exciting and expanding industry.

I have a personal interest in reducing the tax liabilities associated with buying and selling stocks, commodities, or futures. "Trading" as a business became a specialization of my tax service when my three sons became professional traders. Their focus was on trading for financial gain and all tax related matters were directed to "their" CPA. As a result, the main objective of my professional traders tax service is to assist clients in tax management strategies, tax return preparation, and entity structuring and planning.

Are you interested in having a CPA that is personally involved in determining what strategy is best for you? With our professional traders tax service you will be able to make personal contact at any time with a CPA familiar with your specific business. Although located in Texas, I can easily assist traders in other areas of the country. I am a member of the American Institute of Certified Public Accountants, the Texas Society of Certified Public Accountants and have a Masters in Taxation.

For information and rates to secure my services email or call:

Laura F. Hodges, CPA
10310 Quail Meadow
San Antonio, Texas 78230
hodges@taxfortraders.com

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