Tax, Accounting and Business Consulting

  Stock Trader Tax Status (TTS) and Mark-to-Market (MTM) Election Let’s first discuss type of individual who buys and sells securities wearing different hats. Investors: Investors buy and sell security with an intension to income from dividend, interest and capital appreciation. They hold security for longer period. They are investors and are not in trading business. Investors hold their security for a substantial period of time. Sometimes, even forever. When the security is sold the gain or loss will generally be capital gains shown on Schedule D of form 1040 and on form 8949.Investment income is not subject to self employment taxes neither the investment expenses are deductible on the individual tax return. Investor are also limited to capital loss limitation. However, capital losses can be set off against capital gains. Dealers: Dealers can be individual or a business entity. Dealers purchase and buy stocks on behalf or for their customers regularly. Sometimes dealer mai...