Never tell a broker you trade for a living?

sprstpd said:
Questions 5. and 8. are ambiguous when it comes to trading a personal account to make a living. Under IRS rules, if I qualify and declare trader tax status, then I report expenses as a business. The default business is a sole proprietorship. Does a sole proprietorship check the box for either 5. or 8.? Only by looking at the full document for determining Non-professional status and asking about it here on ET could I come to any conclusion. In my particular case, I would not be considered a professional for data fee purposes. If I create an entity to trade through, then I would be a professional. I didn't find these questions trivial to answer though.
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If you claim trader tax status you are by definition a professional in the eyes of the exchange. This was verified by an accountant who specializes in trader tax law.
 
newwurldmn said:
If you claim trader tax status you are by definition a professional in the eyes of the exchange. This was verified by an accountant who specializes in trader tax law.
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I do not agree. The exchange feeds and their requirements for the exemption and the IRS do not have the same standard.
 
newwurldmn said:
If you claim trader tax status you are by definition a professional in the eyes of the exchange. This was verified by an accountant who specializes in trader tax law.
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I was very skeptical to about how I was supposed to be classified (see previous thread), but it comes down to the fact that a sole proprietorship is forced upon you by IRS code in order to fill out Schedule C. But in the eyes of the exchanges, you are just an individual trader and have no associated entity.
 
sprstpd said:
I was very skeptical to about how I was supposed to be classified (see previous thread), but it comes down to the fact that a sole proprietorship is forced upon you by IRS code in order to fill out Schedule C. But in the eyes of the exchanges, you are just an individual trader and have no associated entity.
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When I worked for an investment bank I was considered a professional and my broker delayed my quotes for my personal brokerage accounts.
 
newwurldmn said:
When I worked for an investment bank I was considered a professional and my broker delayed my quotes for my personal brokerage accounts.
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I think there are separate rules for people who work in the financial industry. I would think Question 4 on that list is meant to cover that.
 
helpme_please said:
Are there any advantages in telling the broker that one trades for a living full-time?
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We ask for your employment. You just have to say self-employed trader if that is accurate.

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