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You have some lingering confusion. True one may write every single trade into a Schedule D. One does this if he is a regular investor or if he is a trader. OPTIONALLY one who is a trader may choose to formally elect, in writing, to use the M2M method and if so, then rather than write every...

In 1997 the IRS Code was changed to allow a section 475 M2M election for Traders (similar to that already in effect for Dealers). The rules to elect are stringently enforced by IRS due to their perceived potential for "abuse." Properly done, by a bona-fide securities trader, there are many...

The default method is to depreciate computers over 5 years using MACRS. The optional election that a taxpayer can make in certain circumstances, under Sec 179, is to take some or all of the cost of the current year acquisition as a current year deduction. Sec 179 is a one shot election...

There are ways to get it done... (not speaking about IB specifically, just retail brokerage accounts generally) To make it clear: you still have real time quotes and charting (for example e-Signal or a secondary brokerage account) in your personal name.

Simply do not get market data associated with the professional (entity) account. Get your market data in a personal account. The cost of accounting is tracking the trades, expenses and allocating them to the taxpayers. Whether this is done via a LLC tax return or individual income tax returns...

I wonder that if by paying yourself a performance fee rather than sharing a carried equity ownership interest in the LLC you are #1 needlessly subjecting your compensation to self-employment taxes, and #2 if this does not raise to the level of trader status for IRS purposes, that you are making...

The options are - you can choose to form an entity (can be desirable for control purposes and to show you are serious) and open a brokerage account in the entity's name and trade it. Your record speaks for itself and for many purposes I've seen some of my clients who have done just fine with...

If you type into Google: trader ira 401k limits you'll see a web page giving the various limits

As an investor those $40K in option premiums are probably short-term capital gains. You can not base an IRA contribution on that. But yes possibly if you were to form an entity and the entity earned those premiums and then the entity paid you for the work you do, then you would have "earned...

Okay, it's just symantics... the words we used! Suffice it to say, the Fed does not prohibit margin for IRAs, the SEC does not, Reg. T does not and the IRS does not. Many retail brokers DO prohibit margin for IRAs As I explained earlier one reason that many retail brokers prohibit...

I see you contradict what I've posted, in spite of my being the one who corrected the SEC themselves resulting in them pulling the staff opinions that said similar to what you claim. Okay, I'll go along with you for the discussion. Here's Reg T...

As you've posted it is not considered "illegal" by the SEC, nor by the DOL nor by the IRS. But it is independently "outlawed" (mostly due to confusion) at many retail brokerages houses. One big reason for this is that SEC staff opinions erroneously informed brokerage houses that it was...

How do you propose daytrading with no problem in a non-margin account? Reg T still prohibits cash account free-riding last I heard.

Like most of the IRS system, they know because taxpayers are honest and they self-report. Occasionally brokers do send 1099's to the IRS, though they are not required to. My guess is that occasionally the account is not flagged as being exempt, or someone flubs it during year-end processing...

Fidelity for one, has self-employed 401(k), regular employee 401(k) and various versions of IRAs. In their self-employed 401(k) and various IRAs you can buy stocks, options, and so on. I've not noticed any discernable difference between them at Fidelity. Most of the noticable restrictions...

What are you referring to? By restrictive trading do you mean the free-riding rule: Reg T or "T+3" that does not allow the use of sales proceeds until 3 days have passed? OR do you mean the 401(k) plan you are in limits the amount of activity without regard to the T+3 rule? Which brokers...

I see that you're starting with just enough knowledge to be dangerous :) You might consider first getting up to speed by Googling [ trader tax book ] and [ day trader retirement ] where for a few bucks you will have answers to most all of those questions.

His "Legal Tax Avoidance" link does not even mention the word "tax" one time on the page. Proper planning with real attorneys and with 7 figures to "hide" for various fees ranging from $25K and up YES this can certainly provide a temporary road block should any judgement creditor come after...

You left out State Income taxes in your example, and you left out the power of http://www.unionfederalbank.com/learning-center/financial-library/tax/tax-deferred-compounding.aspx tax-deferred compounding. When these two are factored in then taxpayers can make a decision Yes/No. For...

The first $15K +/- into a self-employed 401(k) actually can save you more at the Federal + State income tax rates than it will cost you in additional FICA/Social Security taxes. That's cash money in your pocket. Beyond the 401(k) portion, then there's the roughly $28K +/- Profit Sharing...