The significance of this distinction is that if you are considered by the IRS to be an “Investor” then your taxation is governed by the rules applicable to investors. If you are considered to be a”Trader” your taxation is governed by the rules applicable to businesses. It has frequently been
said that having a business is the one of the greatest tax reduction opportunities available.
TAX BENEFITS FOR TRADERS
The benefits listed below are available only to qualified traders and not to investors.
ADDITIONAL BENEFITS FOR TRADERS ELECTING IRC SECTION 475 MARKTOMARKET