Entity for traders

[yip1997]

Quote from Don Bright:

[BLicensed traders always are taxed "mark-to-market" - and don't have all the record keeping hassles involved in being a retail guy.
Don [/B]

Only if a licensed trader works for a prop firm.

My biggest concern with working for a prop firm is related to carry-over loss. Suppose I have 20K carry-over loss, and if I make 10K profit with K-1 from a prop firm, can I deduce my previous loss of 10K, and pay no tax on my K-1 profit? If I use a retail account, I know I don't have to pay any tax on profit up to 20K.

 

[syswizard]

Quote from Don Bright:
"Trader Status" is only for retail traders, and has nothing to do with licensing.
Licensed traders always are taxed "mark-to-market" - and don't have all the record keeping hassles involved in being a retail guy.

Yeah Don, but we're talking about the issues of expense deductions and potentially about capital loss limitations as well. What does "mark-to-market" have to do about these issues ?
When you say "record keeping hassles". you mean licensed professional traders don't have to account for their expenses ?

 

[Don Bright]

Quote from syswizard:

Yeah Don, but we're talking about the issues of expense deductions and potentially about capital loss limitations as well. What does "mark-to-market" have to do about these issues ?
When you say "record keeping hassles". you mean licensed professional traders don't have to account for their expenses ?

OK, there are no "capital loss issues".

What I mean by record keeping, is simply no matching of trades is required...which can be quite a hassle (I'm told).

All expenses are run through the Clearing Firm, with the "outside" expenses submitted in December. This keeps the K-1 number at the lower amount, and no red flags.

I'm not trying to debate anything here, I was just trying to help by sharing how things work at this level. Saving money and taxes by not needing "entities" is of value I feel.

All the best,

Don

 

[yip1997]

Quote from Don Bright:

All expenses are run through the Clearing Firm, with the "outside" expenses submitted in December. This keeps the K-1 number at the lower amount, and no red flags.
Don

Don,

Most prop firms don't do it. I can see the value of joining your firm instead of others.

Does your firm offer options, future like vtrader?

 

[Don Bright]

Quote from yip1997:

Don,

Most prop firms don't do it. I can see the value of joining your firm instead of others.

Does your firm offer options, future like vtrader?

Some of our traders trade futures and options, but most don't. If you have a good understanding of the hedging techniques, then we can certainly entertain the idea.

Feel free to call to discuss. 702.739.1393.

Don