Question by Utopia: can you write off trading commision fees from daytrading/investing on your taxes? Is there a limit amount?
can you write off trading commision fees from daytrading/investing on your taxes? Is there a limit amount on the commision fees you can write off?
I have $ 6,000 in daytrading commision fees, I have not elected the MTM election yet so are these fees still deductable?
Best answer:
Answer by Swaminathan P
for individual tax payers – no such facility
for trading firm, provisions can be availed.
Give your answer to this question below!
It appears that, if you have established yourself as a “trader” in the eyes of the IRS, you can deduct trading commissions as business expenses. It shouldn’t make any difference whether or not you’re an MTM trader.
If, on the other hand, the IRS regard you as an “investor”, then your investment expenses, including commissions, are deductible only if you itemize and only to the extent that they exceed 2% of your AGI.
Trading commissions come right off the top on what you sold the stock for. Just as the commission is added right when you bought the stock. Use these two figures to find out if you sold at a gain or a loss. Now add all you gains. Added all your losses. If you end up with a positive amount you made money and if you end up with a negative amount you lost money for the year. Anything you bought in 2007 and still owned on Jan 1st 2008 doesn’t count. In other words your commission are already built into the system and are not reported. Yes day trading can add a lot of pages to your tax return because every trade must be listed.
^^^Lawrence gave you the correct answer.
BTW are you a prop trader ? They should be able to help you at your firm.