Forex
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07-29-2008, 01:09 AM
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Qualifying for Trader Tax Status
A business trader meets most of the following qualifications:
•Trades full-time or part-time, all day every day. •Hours spent: Spends more than three hours per day, every day with few sporadic lapses. •Number of trades: More than 750 round-turn trades per year, but there is no magic number in case law. •Holding periods: Mostly day trades or swing trades, and few positions are held for more than a few weeks. Investment positions are segregated. •Intention: To run a business and act accordingly with record keeping. •Business tools: Has significant tools and business expenses. You can claim trader tax status after year-end; it doesn’t need to be elected in advance. It’s easier to qualify for trader tax status as a part-time forex trader than a part-time securities or futures trader. Forex trading is often done at night, after job and other market hours.      
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