TRADER TAX STATUS

There was a time when a person’s primary vocation or profession was INVESTING.  He may have bought a comprehensive computer system, scanners, printers, network equipment and so forth.  He had a subscription with The Wall Street Journal and traveled to research companies to invest in.  And all of these direct investment related expenses were tax deductible.  But then the IRS and Congress decided to punish the rich and wealthy and take away all of these deduction and gouge the wealthy every way they could.  So one by one Congress and the IRS took away each and every deduction until the last remaining deduction was Margin Interest and nothing else.  But somewhere along the line someone countered this and created something calle Trader Tax Status.

So now you go and ask your broker what is Trader Tax Status?  He scratches his head and admits he does not know..  You go and ask your CPA the same question and he too does not know.  And finally you ask your tax lawyer and the response is the same.