Company Trading

[tntneo]

There is quite some info available regarding trader status and mark to market etc for an individual.

But what about a company ?
When a company is trading actively (obviously falling into the Pattern Day Trading), how much tax will it pay on gains ?
Is it as important to a company to claim mark to market as it is important for an individual trader ?
Will the gain be declared as capital gains or ordinary income ?

tntneo

 

[Optrader]

MTM accounting transforms cap gains/losses into ordinary income/losses regardless of form (e.g. sole proprietorship, LLC, S-Corp, LP), AFAIK.

Also, again AFAIK, a legal entity can elect MTM accounting as soon as it is formed (i.e. it is not limited to the 1/1-4/15 window period).

 

[tntneo]

thanks, indeed I see confirmation and useful information on these sites :

http://www.fairmark.com/traders/index.htm

http://www.irs.gov/formspubs/display/0,,i1=50&genericId=12278,00.html

http://www.irs.gov/formspubs/display/0,,i1=50&genericId=11277,00.html

mark to market it is. an entity (LLC or C-Corp) is a good idea to (much easier to deduct expenses for traders and justify 'trading as a biz').
tntneo

 

[Optrader]

There's also some useful information on

http://www.traderstatus.com

 

[tntneo]

thanks opttrader..
it lead to this too

http://www.hoven.com/daytradr.html