Qualify For Day Trader Tax Status in 2023!
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- Опубліковано 2 лип 2024
- Discover how to qualify as a day trader in 2023 with TraderFyles. This video guides you through the essential criteria, including trading volume, unique trading days, and crucial tax reporting with Forms 8949 and 4797. Whether you're a seasoned trader or new to the game, TraderFyles is the tool you need to streamline your journey. Stay ahead in the trading world with expert tips and insights.
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Time Stamps
0:00 Introduction
1:40 Trader Status Criteria (1:51 link old video)
5:09 How To Determine # of Trades
5:31 Number of Trading Days
6:46 Economic Substance
7:30 Tax Reporting For Day Traders
Social Links
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/ brianriveracpa
DISCLAIMER: I am not a financial adviser but fortunately I am a CPA :). These videos are for educational and entertainment purposes only and should not be taken as "individualized" tax advice. Should you need tax solutions I highly recommend consulting with a professional or our CPA Firm. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.
AFFILIATE DISCLOSURE: I only recommend products and services I truly believe in and/or use myself. Some of the links on this web page are affiliate links, meaning, at no additional cost to you, I may earn a commission if you click through and make a purchase and/or subscribe. Commissions earned will be used towards growing the content this channel.
🖥 Traderfyles - automate your capital gains reporting! www.traderfyles.com
Thank you, Brian!
Awesome stuff 🙏🏽🔥⭐️
Good information. Well done.
Powerful. Looking forward to doing business with you soon!
Def Subscribed and ready to level up!
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Thanks bro 🙏
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I have spent the about 12 hours this weekend researching CPA's specializing in stock trading taxes - your videos and comments are by far the clearest and most substantive of anyone's I have reviewed. As a former non-tax CPA ("Big 8" compared to your "Big 4" - which certainly dates me) I understand the importance of partnering up with a stock tax specialist with trading expertise, especially in the complicated world of trader taxes. I will definitely be hiring your team later this year when I am ready to have you set up my multi-member LLC for trading.
Great video and quality software! I highly recommend it!
🙏🙏
So happy to see a video from your channel! Can’t wait to become a client. I have one question, does the Wash Sale rule apply to Forex and crypto day traders/scalpers?
Thanks! Does not apply to forex or crypto traders. Stock and options traders only
Super stuff! I was wondering about traders' exemption from wash sales. Can they be used as ordinary losses in the same year to offset ordinary gains or do they have to be carried forward as an NOL for future years offset (at 80%)?
Let’s go!
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Hoping you can answer this question, what if you meet all the criteria for active day trader, but currently incurring losses, will that disqualify you for TTS? Thank you.
New partnerships that Xeventy annouced will skyrocket XVT token soon.
any information about Futures contract taxes?? Like ninja trader platform??
Does Traderfyle work for crypto trading? Also, do crypto traders qualify for 475f election?
@brian rivera i just found out about you brother. Love your content and knowledge. Im a Tax professional, Trader as well as an accounting student. I will definitely be setting up a call with you soon.
Does your software work for us future traders as well
We are working on a future release for form 6781 .. futures trader reporting as well
Do you have any recommendations for a new forex trader for a cpa in the north jersey area ?
What’s the benefit of becoming dAy trader tax status ?
Does it work with crypto also? Definitely a great tool to get sd I'm fairly new to the to all of this..thanks for the great video. Would be awesome if you could do a video explaining on crypto taxes in detail especially regarding the bankruptcy crypto exchanges and how all that works for filing in 2024.
The integrations for crypto are still a work in process. It reads CSV data well so if you have issues just ping customer service and they will be able to format it for you.
Is there anyway to qualify for TTS status if you start mid-year? Would they consider the same percentage of trading days from the day I started trading?
Can you do an example of mark to market from one year to the next?
Of how to do the election?
Hey Brian I really need to know if I qualify for Trader Tax Status for 2023. I know I met the requirements volume wise & everything else other than number of days traded. How do I find out for sure if I can qualify?
With prop firms like Apex Trader Funding or Top Step giving traders an annual 1099, can a trader still be classified as a day trader based on the minimum trade requirements if they are inside a funded prop firm account or are those profits taxed differently than profits obtained in a similar manor in your own account?
In 2023 I placed many trades--over 1000--and mainly focused on short-term swings in the market. This is my main source of income. I do this every day etc etc.
After tax loss harvesting however, about half my income was dividends / interest and not trading.
And so, in terms of profit, after selling losses, half of profit is not swing trading, half is actually dividends and interest.
Can I claim trader tax status?
Thank you.
Hey Brian , really nice video! I was wondering if I could help you enhance Editing in your videos and also make a highly engaging Thumbnail which will help your video to reach to a wider audience ?
Send me your portfolio
work for forex?
hello
hello i do crypto trading maybe 2-3 trades 4 times a week
some trades will be sold within 31 days
can i do mark to market
What about trading losses? And are there advantages using an LLc vs sole proprietor?
Trading losses capital loss treatment. Mark to market = ordinary loss but you must qualify as a trader to use mark to market
Quick question. Does your firm have a lot of experience with spot forex traders that want to benefit from IRS 1256 treatment for forex futures/forex forwards contracts. Essentially trading Forex Majors for the US Dollar. Does your software handle importing data from Forex brokers. Thanks. Appreciate the video.
It’s on our development roadmap.. because 1256 contracts report in summary format; there is not a need to report every single trade.. your trade data just needs to be summarized for trader status
What if we trade once a day, 5 days a week?? Would we qualify?
Gracias , i am new at this , but i live in New York would you be able to do my taxes? I also trade options with about 5000$ and funds settle by next day or second day. Must i still qualify with the 25,000$ as in stocks? what is 1 UNIQUE TRADE? Thanks in advance
If your able to hit all criteria with a cash account it’s possible to make it
Can a full time W2 employee qualify for Trader status if he/she meet all BEHAVE conditions?
Is this an app or just a website for now?? (Couldn’t find the app)
Also what is the process if I trade for a PropFirm but no profits of yet. Just desk fees/evaluation cost & other expenses.
Yes you have to click “get started” to register for a free account.
Futures 60/40 baby
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Can you clarify economic significance? You mentioned getting close to million plus. Does that mean the total volume traded throughout the year is close to a million dollars?
Exactly usually a million plus in sales proceeds for equity traders.. options sometimes a little lower due to cheaper options premiums.
So despite meeting other criteria of the behave but encomic significance was 50000 then that disqualifies? Is that net return? What about losses ?
One question I can't find ANYWHERE.... is there any tax disadvantage to trading a zillion times over the course of the year, hopping in and out of trades when I can make even the smallest profits...? Or are my earnings just a sorting of the difference between the total buys and sells, regardless how many times I made a trade? In 7 months I've made maybe $50K but the amount of money moved over that time was shocking to me. Even the total number of trades I've made (many thousands, I have the $25K+ PDT rule covered) was totally unexpected, and I've been worried that somehow the extreme totals of my buy&sell actions might have some kind of tax effect. Does this come with some kind of danger or expense that I don't know of yet....?
Disadvantage ? Probably over trading without any success.. uneducated about the wash sale rule (your taxable income could be higher than realized gains). This normally happens if you trade the same ticker over and over again without rotation.
@@BrianRiveraCPA Nope, I know about the wash sale rule from your excellent video on it. 🙏 So if nothing else stands out to you, that's what I was wondering. I really appreciate the reply.
Xeventy's billboard caught my eye. Had to look it up, and the presale seems intriguing!
Does all this apply to futures trading as well? Also how are taxes on funded accounts (forex and futures)?
Yes to futures - no to funded accounts. Funded accounts receive a profit split which is treated as independent contractors.
So If we use funded accounts for futures, it will be taxed as regular income since we are considered independent contractors, correct?
@@BrianRiveraCPA
Hey brian , i don’t know if you will respond but any help is useful . I have traded ticker symbol AAL through december and january . i did end up green on the ticker but i know this moved the wash sale deferred to 2024 year and i cannot claim it in 2023 but i traded the symbol in 2023 with Td ameritrade and 2024 with Tradestation what do you recommend me to do ??
Id recommend trying traderfyles to make sure you have visibility of your wash sale deferrals
What is considered a unique trade... ? Tnx
Trade execution
I’m curios, if you open a LLC trading for your self is it necessary to get a EIN for the LLC?
Yes it is
what if you started as a long term trader but switch to day trading in june.... if you traded 100% of the days (plus some in the first 5months) and did 20 trades per day? do i need to file something now?... next year its LLC and or S corp im guessing
does the tax qualifier status apply if you're only trading the indices market on a daily basis?
Applies to stocks, options, crypto, forex and futures.
My trade volumes, trade frequencies on hours and days, holding period, and size of account all meet day trader tax status. I do 1,000 to 2,000 trades per year mainly on Put Options Sell of Open and can generate 6 figures income. The sales proceeds of put option is the premium (is this correct?) and since I am doing mainly Put Option, it doesn’t generate economic significant like buying/selling stocks. So can I still qualify for day trader tax status if my sales proceeds is no where close to $1M plus? How do you calculate sales proceeds on Put Options?
Correct. It’s the total of all of your sell to open orders that were executed.
@@BrianRiveraCPA thank you - Can I still qualify for day trader tax status if my sales proceeds is no where close to $1M plus?
i just started my forex business does this work with the forex platform.
Forex reports in summary format.. for now it’s on our product road map
calling you asap
So to by pass the 189 day rule and trader status rule , establishing a trading LLC , what type of restrictions would one have ? Thanks
Won’t be eligible for section 475(f) mark to market accounting
@@BrianRiveraCPA hm what i researched was the LLC is not subject to normal trader qualifications as an individual . I am establishing a new firm let s say in July. It would not make sense i won't be eligible for market to market accounting int hat case. Would you mind elaborating on this answer?
@@BrianRiveraCPA what’s the best way to get a video consult with you and what are the charges involved ? Thanks for getting back to me
To meet the numbers of trades and days required in a year , can they buy one share in one minute and sell it in the next minute?
Absolutely. 👍
Thanks for reply.
Does trader status apply to prop funds as well
Unfortunately no.. independent contractor treatment.
Thanks for the great content. And quick responses to questions.
Greetings!! I am interested in knowing how i can get in communication with you since I am looking to file this year. I am a funded trader and have been having difficulties finding a tax professional in this field.
Shoot an email to our team at support@tradertaxcpa.com
I have about two weeks ago and never received an email back
@@BrianRiveraCPA
Hypothetically speaking, say I had a $1,000 forex account and grew it to 10,000 (9,000 in profit) but then I lost 4,000 putting me at a total of 6,000. (5,000 in profit)
Would i pay tax on the entire 9,000 redardless if i lost it or would i only pay tax on the 5,000?
You’ll owe tax on your net profit. Ie $5,000
@@BrianRiveraCPA It's priceless to be able to see such answers from you Brian- for anyone who searches the internet for answers, 99% of the complicated questions are only answered by people with no verifiable background, or people who are EITHER CPA's OR familiar with daytrading. You're both, and someone who is familiar because of your UA-cam channel. If there was a forum where you *personally* answered submitted questions (even if it was for $100+ each) I bet you would be shocked how many requests you'd get. ❤
@@VicFix Same. I've thought some version of this before- it's hard to find someone with the same background and presence as Brian- CPA, military, trading; someone you can trust and with experience in both fields.
Appreciate that 🙏
Invested in Tier 2 for that sweet 10% bonus. Let's go Xeventy!
What about Forex?
That’s the same thing I’d like to know as well
What about forex ? Forex traders can qualify for trader status ; but reporting is summary format. Not individual trades
Hi, what if you're a funded trader??
Not applicable . Funded traders are independent contractors
@@BrianRiveraCPA is that a bad thing for a funded trader tax wise??
In the beginning no; but as your profit rises you’ll have an additional layer of tax called self employment tax which is on top of federal/state income tax.
Welp you don’t speak about futures or forex……open market for you tax experts
we cooking no worries..
Hey Brian. This is a more personal question, but are you a follower of the Lord Jesus Christ?
You said in another video if I apply for Mark to Market accounting but have a long term stock I could lose that long term status. But what if It's in my Charles Schwab account? I've been holding for 3 years. But I want to open another account on Webull to day trade in and I want it to be market to market. Could I still do this or will it also make my other stock on another brokerage lose long term capital gains? Please respond back. Im looking to put $40,000 on Webull to trade with MTM accounting. Also how do I call you. I want to become a client but I read we can't talk to you until half of the year is up?
"Our greatest fear should not be of failure but of succeeding at things in life that don't really matter." *Francis Chan