A $32.9 million trading year with hundreds of trades was not enough to be considered a trader.

A $32.9 million trading year with hundreds of trades was not enough to be considered a trader.

In Nelson, the taxpayer traded on 121 of 250 trading days. The court found that her activity was not substantial. The dollars did not make her a trader.

How do you claim trader status? Establish the activity before claiming the deduction. A trading business can deduct business expenses without a §475 election. Electing mark-to-market is a separate decision, and can create tax on unsold gains.

Daily Tax Planning Strategy: Trader versus investor

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