The IRS buckets everyone by default as an “investor” for tax purposes.
In this video we discuss the criteria that needs to be met in order to qualify as an active day trader in the eyes of the IRS.
This is not an application but a set of facts and circumstances that must be met each year to meet the qualification!
B – Business Expenses
E – Equipment Used in Trading
H – Hours Spent in The Market (4+ per day)
A – Average Holding Period Not To Exceed 31 days
V – Volume of Trades (720+)
E – Extent at which you trade (75% of market days)
If you qualify you get TWO main benefits:
a) Business Expense Treatment and
b) The opportunity not “right” to Section 475 M2M
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