Tax Planning ShutterstockYear-end tax planning for traders varies based on eligibility for trader tax status (TTS) in 2020 and 2021. There are different strategies to consider for investors, TTS traders using the capital gains method, and TTS traders using Section 475 MTM ordinary gain and loss treatment. We allow TTS traders to go back six-months before TTS inception for Section 195 costs and even further back for hardware costs. For example, if your CLCO is $25,000 going into 2021, and you have 2021 capital gains of $30,000, then you’ll have $5,000 of net capital gains for 2021. For more year-end tax planning strategies, see Green’s 2020 Trader Tax Guide and stay tuned for blog updates.

Source: Forbes November 11, 2020 23:03 UTC