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The case for trader tax status: Analysis of an IRS appeal
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AT-April 2011-1
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A detailed accounting of all relevant factors produced a favorable outcome for a taxpayer whose trader tax status was questioned by the IRS.
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Detailed Description
GreenTraderTax recently dealt with the IRS on an important appeals case involving a stock options trader denied trader tax status for a three-year period. Such a ruling negates Section 475 mark-to-market (MTM) ordinary-loss treatment and results in higher taxes.
The taxpayer had successfully qualified for trader tax status in previous years, but the IRS took notice after he suffered significant trading losses and used Section 475 MTM ordinary-loss treatment in the three tax years in question.
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