Tax Tip #186
Ralph Loggia • March 12, 2024
Day Traders
Thinking of giving up your day job to become a day trader for 2024? Better hurry!
An election needs to be made by 4/15/2024 for the IRS to recognize day trader status & the tax benefits that come with it.
To be engaged in business as a trader in securities, you must meet all the following conditions:
- Profit from daily market movements in the prices of securities and not from capital appreciation;
- Have substantial activity;
- Carry on the activity with continuity and regularity.
One of the many advantages of being a day trader is if there is a net capital loss of more than 3K for the year. As an investor, the loss is limited to 3K and the remainder is carried over to the following year. As a day trader, the loss is deductible in full in the year of the loss.
Have day trader-related questions? Reach out to a team member.
