qqq futures

[FX-Trader]

NQLX Launch Day Products

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ETFs Will Be Announced at a Later Date

www.nqlx.com/NQLX/SSF/listedstocks.stm

 

[vulture]

I have to agree with the statement that one of the bigger obstacles going forward will be the fact that they do not qualifify for the 60/40 tax split...After all, this is a futures contract, it makes no sense to simply tax this as an equity...

 

[3dog]

http://www.nqlx.com/NQLX/PressRelease/NQLX QQQ release.pdf

 

[aphexcoil]

Originally posted by vulture
I have to agree with the statement that one of the bigger obstacles going forward will be the fact that they do not qualifify for the 60/40 tax split...After all, this is a futures contract, it makes no sense to simply tax this as an equity...

Where did you read this?

 

[Mike Brown]

SSFs are not fungible.

 

[redzuk]

Originally posted by vulture
I have to agree with the statement that one of the bigger obstacles going forward will be the fact that they do not qualifify for the 60/40 tax split...After all, this is a futures contract, it makes no sense to simply tax this as an equity...

If you trade every day and add liquidity once in a while, are you a dealer? Has anyone seen an official definition of "dealer" for IRS purposes?

http://fenews.com/fen28/ssf_feature.html#heartoftaxes

 

[tntneo]

to be a dealer, you must be licensed, have a seat or work for a firm with a seat.
afaik a retail trader, can't claim to be dealer.

 

[redzuk]

“Right now a dealer in options is limited to someone who is a market-maker or specialist with an exchange—which means you must have signed up to affirmatively make a market in the option,” says Pomierski. The rules for who’s a dealer in stock futures are still being developed. When the Commodity Futures Modernization Act was enacted, no one could predict how exchanges would put their structures together. So Congress required the IRS to develop standards for determining who was a dealer, even in a situation where there might not be traditional dealers or market-makers. “The language gives some room for taxpayers to argue that dealers in this context should be somewhat broader than dealers in other contexts,” says Erika Nijenhuis, a partner at Cleary, Gottlieb, Steen & Hamilton, an international law firm. “It’s possible a dealer could simply be a very active trader providing liquidity to the market.”


this is out of the article by Nina Mehta, that i linked to.

 

[tntneo]

From the IRS web site
"The proper classification is important to determine how income and expenses are to be reported. Investors trade solely for their own account and do not carry on a trade or business. Their securities sales result in capital gain or loss and their deductible expenses are itemized deductions. Dealers sell securities to customers in the ordinary course of trade or business. Their sales result in ordinary gain or loss and their deductible expenses are trade or business expenses. Traders buy and sell securities frequently but have no customers. Their purchases and sales result in capital gain and loss, and their deductible expenses are trade or business expenses."

it does not mean that you HAVE to be a dealer to benefit from the same tax treatment (mark to market and other advantages).
but dealers have actually more work to do than traders when filing taxes.

for options, see publication 550 at the IRS.

so if your question is regarding paying less taxes, no doubt you can. but you are not a dealer unless you have customers and you are licensed, akaik.
you are not a market maker or dealer (not the same) simply because you do the same kind of work. and in fact you probably don't want to be officially a dealer.