There’s huge interpretation to much of this. Many say trade at least 75% of the market days (around 180 days) and have ~4-6 trades a day (2 opens and 2 closes for total of 4..doesn’t have to be day trade, but ~4-6 overall a day..can’t just have like 1M trades for 10 days a year…that’s not gonna cut it). These are all just guidelines as there are no absolute specifics but rather interpretations from tax court cases. Having the right representation (a CPA who knows this stuff) for this is critical if you are making money and probably even more so if you are losing money (otherwise you are subject to potentially just $3k per year loss limitations which doesn’t help much on a large $20k or $200k annual loss as an “investor” instead of a “trader”).  

1 min read
Mark As Read
Share post
Like post