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Discussion Forum Index --> Tax Questions --> Professional Trader
Poorhouse Road (talk|edits) said:
| 24 January 2007
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| Does anyone do a professional trader. A conversation yesterday with a potential client revealed I knew nothing about a professional trader other than they were considered a business and could deduct expenses that other traders could not. I was asked about Form 3115 and some special filing requirement by April 15th of which I knew nothing. She told me she had spoken to several accountants and no one knew much about it. I told her I had never done a professional trader, but I was willing to get answers to all her questions. I also told her that if she were successful she would be facing SE tax on her earnings which could more than offset any savings from expenses. Am I right about that?
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Solomon (talk|edits) said:
| 24 January 2007
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| A securities trader will report transactions on Sch D unless an election called mark to market was previously made - then on Form 4797. Expenses go on Sch C. I am assuming you mean a trader working at home. On the other hand, if this "professional" trader is trading for other people's account that is different. Clarify the terminology of "professional" - that is to say, trading for others or for himself/herself. In any case, a 3115 is not necessary as I recall. By the way, no SE tax if trading for own account. Publication 550.
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Solomon (talk|edits) said:
| 24 January 2007
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| I would add one thing to the above post. Make sure you explain to your potential client quite clearly the difference between a trader and an investor as it seems you equated the two in your post.
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Death&Taxes (talk|edits) said:
| 24 January 2007
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| NCPE in Lafayette LA used to devote 45-60 minutes of their update seminars to this subject every year, but it seemed to disappear after the market collapsed in 2000-2001. I know some have their old workbooks, which have a lot of good information in them, but I do not.
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Solomon (talk|edits) said:
| 24 January 2007
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| DT -Fairmark.com is a decent site. The Tax Help tab.
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