Prop firms are out there because many traders find that this is how they can maximize their profits.
*** Awesome News Flash *** Beginners have no business putting up 5k at a prop firm if it's their first time trading off a level II screen anyway. We've seen Tuco's papers, the losing accounts...
I've seen quite a few contracts and BP was never stated on the contract, it was usually agreed on verbally or on a separate online sheet.
BP is one of those variables that can be changed arbitrarily at most prop firms.
I know a few americans that trade with Canadian firms, I don't know about taxes though ...
I'm pretty sure they file it as independant business income.
With 5k, you can have access to anywhere from 250k to 1 million intraday, which is more than enough to make a living. Of course, that implies that one trades profitably in the first place.