Robert A. Green, CPA is a Contributing Writer for Active Trader Magazine, the leading monthly magazine for active traders.
Active Trader magazine closed in December 2014. Mr. Green wrote the “Business of Trading” column for 14 years.
Green’s Active Trader articles
January 2015: 2014 year-end tax planning for traders
November 2014: IRS warns Section 475 traders
September 2014: Tax treatment: Futures on foreign exchanges. Click here.
August 2014: Puerto Rico’s tax incentives. Click here.
April 2014: Tax tips: Entity refresher. A recap of the various trading entity options for traders, and some new advice for 2014.
March 2014: Recent court cases deny trader tax status. New tax court decisions have prompted a trader tax status review.
January 2014: Year-end tax planning for 2013. If you want a tax reduction, don’t skip year-end planning. There is only so much you can do after the year closes.
November 2013: Common trader tax mistakes. Learn about the mistakes traders and tax preparers make before planning and filing taxes, and how to avoid them.
October 2013: Using retirement plans in trading and alternative investments. Don’t get sucked into attractive-looking IRA-trading setups that could cost you money and get you in trouble with the IRS.
June 2013: Navigating brokerage bankruptcy MF Global and PFGBest deposit losses have nuanced tax treatment.
March 2013: Post-fiscal cliff tax planning for traders. While most traders generally came out okay in the fiscal cliff deal, upper-income traders should consider a C-corporation or S-corporation in 2013 to avoid Obama-era tax hikes.
December 2012: Tax treatment for swaps. Whether you’re trading options on swaps, futures swaps, or options on ETFs partially consisting of swaps, you’ll want to learn how these transactions should be classified on your tax return
November 2012: ObamaCare and high-income traders. The first revenue raisers of ObamaCare are set to kick in on Jan. 1. This primer explains what these measures are, how they affect traders, and how to proceed in the best manner possible.
October 2012: Proprietary trading basics. Prop traders and retail traders are two significantly different animals. Learn what it means to be a prop trader, certain pitfalls to avoid, and how to handle your taxes.
June 2012: The cost-basis situation for trader taxes. The IRS’ new rules might have laudable goals, but their haphazard implementation is causing traders and investors big headaches.
May 2012: Retirement plans for traders. Learn about the different retirement account options and figure out which one is right for you.
March 2012: 2012 tax primer, part 2. Take advantage of lower futures tax rates when possible, make the right elections on time, and consider an entity and retirement plan strategy to save thousands more.
February 2012: 2012 tax primer, part 1. Don’t sell yourself short come tax time. Business traders enjoy more tax breaks than investors — if they are educated, act on time, and use good tax preparation skills.
December 2011: Traders as entrepreneurs.
October 2011: Tax reform and the debt ceiling negotiations. How will possible tax changes affect active traders?
August 2011: Reporting income from foreign accounts. If you have foreign accounts of more than $10,000, you better come clean with the IRS or you could be in a heap of tax trouble — the type that can cost you hundreds of thousands of dollars and even land you in jail.
June 2011: ETF tax treatment. ETFs are useful trading tools, but the variety of structures and markets they encompass can make them cumbersome from a tax perspective.
April 2011: The case for trader tax status: Analysis of an IRS appeal. A detailed accounting of all relevant factors produced a favorable outcome for a taxpayer whose trader tax status was questioned by the IRS.
March 2011: Handling IRS notices and exams. If you find yourself confronted with an IRS notice, learn how to proceed to avoid tax trouble.
September 2010: Trader tax treatment options. It’s not always clear how the IRS treats the growing number of instruments traded today. This review can help. (This is an excerpt from Green’s 2010 Trader Tax Guide.)
June 2010: Trader tax scams. Beware of tax “experts” touting dangerous ideas. .
May 2010: Entities for traders. (This is an excerpt from Green’s 2010 Trader Tax Guide.)
April 2010: Trading business expenses. Tax-time tips for traders: Don’t forget your business-expense deductions. (This is an excerpt from Green’s 2010 Trader Tax Guide.)
February 2010: The financial transaction tax. A tax on financial transactions has been in the news lately both globally and in the U.S. Will a tax of this nature become a reality? By Robert A. Green, CPA. Robert has written extensively on this tax on his blog. Visit this section of our site.
December 2009: Year-end tax planning. Some simple ideas for tax savings in 2009. By Robert A. Green, CPA. See several year-end tax planning articles on our site.
October 2009: Solo 401(k) retirement plans. Calling all full-time traders: The solo 401(k) plan is one retirement savings option worth checking out. By Robert A. Green, CPA. Read our blog for similar content.
July 2009: Trader tax status is not for everyone. Some traders qualify for trader tax status more easily than others. However, there are stiill plenty of tax breaks for those who don’t. By Robert A. Green, CPA. Read our blog late April and May 2009 for similar content.
April 2009: A taxing issue for traders. A proposed trade-transaction tax would significantly increase costs for traders, but it would also threaten wide swaths of the financial industry and make the U.S. markets less attractive to outside investors. By Robert A. Green, CPA. Click here for similar content on our blog.
February 2009: Diversify your time and money with a tax-advantaged “active investment.” Becoming an “active investor” can provide tax savings. In this article, we show how to qualify as an active investor and provide ideas for investing in the green energy market. By Robert A. Green, CPA. Click here to visit our new active investor area.
December 2008: Trader tax cases setting bad precedent. Two recent tax-court cases have put more pressure on traders to justify claiming trader tax status. By Robert A. Green, CPA. See our blog version too.
November 2008: More tax tips for traders. The IRS has enhanced its software to automatically look for discrepancies and send tax bills. Freshen up your trader tax knowledge with these tips and learn what to do when faced with a “tax exam.” By Robert A. Green, CPA.
October 2008: The election and trader tax issues. What’s at stake for traders in the coming election? By Robert A. Green, CPA.
August 2008: Being a (successful) trader isn’t easy. Making a living as a successful trader requires hard work, significant capital, discipline, and risk management. To build a feasible trading business plan, you need to stay clear of inappropriate trading programs and schemes. By Robert A. Green, CPA.
February 2008: Making the most of trader tax status. One of the biggest benefits of gaining trader tax status is additional deductions. This follow-up to last month’s article explains how to make the most of this advantage, as well as the benefits and drawbacks of forming an entity. By Robert A. Green, CPA.
January 2008: A trader tax primer: The beginning of a new year is a good time to review trader tax rules. In the first part of a multi-part series, we look at what it takes to qualify as a trader and some of the benefits that come with it. By Robert A. Green, CPA.
December 2007: Another taxing problem. As if traders didn’t have enough tax concerns, those with mortgage and real estate problems have a new set of problems on their hands. If the sub-prime crisis affected you, make sure you understand your tax options. By Robert A. Green, CPA.
November 2007: Carrying things too far. Congress wants to change laws that give big tax breaks to hedge funds and other money managers. But will the changes negatively affect investors as well? By Robert A. Green, CPA.
September 2007: More schemes and scams. In the second of a two-part series, a trader tax expert discusses more ways the Internet is being used to draw traders to inappropriate practices. By Robert A. Green, CPA.
August 2007: What’s behind the curtain? Get-rich-quick schemes abound on the Internet, and some unsavory promoters target online traders. In the first of a two-part series, we look at some of the scams and how to avoid them. By Robert A. Green, CPA.
June 2007: To entity or not to entity. Forming a business entity can be advantageous for a trader, but with so many types to choose from, making the right choice isn’t easy. By Robert A. Green, CPA.
April 2007: Both profitable and losing business traders can benefit from trader tax breaks, providing they qualify and elect to use them on time. Unfortunately, far too many traders miss out on these benefits and pay more than they should. By Robert A. Green, CPA.
March 2007: Are you a Trader? Qualifying for trader tax status delivers savings, but the IRS rules are vague and most traders miss the boat. Learn how to navigate around the nuances to build a winning position in the eyes of the IRS. By Robert A. Green, CPA.
February 2007: For easier taxes, plan ahead. For active traders, taxes can be difficult – and costly – if you’re not proactive. These tax-season tips can help fatten your refund check or lower your tax bill. By Robert A. Green, CPA.
December 2006: Trading, or just PRESSING BUTTONS? Automated trading systems, long popular on Wall Street, are now available to the retail trader. Will the IRS attempt to deny tax benefits to traders who use automated solutions, claiming they are not doing any actual trading? By Robert A. Green, CPA.
December 2006: More to come? Regulators crack down on prop firms. By Robert A. Green, CPA. Inside the Market column edited by Jeff Ponczak.
November 2006: Courting better TAX rules. When battling the IRS over MTM elections, traders have not fared well. However, a recent tax court ruling provides some help. By Robert A. Green, CPA.
October 2006: The state of trader TAXATION. Online traders are free to work in any state or country, which allows them to avoid high-taxing jurisdictions in favor of more tax-friendly areas. However, there are many nuances to the tax code that could make this more difficult than you think. By Robert A. Green, CPA.
My “Business of Trading” column was on hiatus for the summer months. Look for my articles every month from October through the end of tax season next year.
May 2006: Putting your best foot[note] forward. Well-written footnotes will significantly reduce the risk of an IRS examination and unlock trader tax savings. By Robert A. Green, CPA. You can get multiple footnotes in our trader tax examaples guides.
April 2006: WHAT’S MY LINE? Prior to 2006, the industry practice for active traders was to summarize capital gains and losses. Unfortunately for traders, a recent IRS clarification forces line-by-line reporting. While more IRS guidance is possible, there are software programs that provide an easy fix to this problem. By Robert A. Green, CPA
March 2006: A (tax) break for traders. The rich may not have many tax benefits, but traders sure do. Find out how to take advantage of the many tax breaks at your disposal. By Robert A. Green, CPA
January 2006: Avoiding the HEDGE-FUND STORM. Hedge funds have been beneficial to the U.S. economy, but they have also been at the center of many recent controversies. Is that a coincidence, or do financial storms form at the weakest regulatory link? Learn how to spot trouble and reduce the damage with tax benefits. By Robert A. Green, CPA
December 2005: WHAT’S IN YOUR TAX FUTURE? Additional income tax cuts, a new national sales tax, or a flat tax could be on the horizon. Or recent income tax cuts could be reversed to pay for huge deficits and spending needs is also possible. While Republicans continue to preach tax reform, reduction, and simplification, certain states are following their own agendas and raising taxes. If a tax war is coming, you need to know how to defend your tax plans. By Robert A. Green, CPA
November 2005: The pre-hedge fund hedge fund. Starting a hedge fund is no simple undertaking, and it can be an expensive process. However, by starting out with an incubator fund, you’ll save time and money in the beginning – and potentially in the future too. By Robert A. Green, CPA
October 2005: SIZE DOESN’T always matter. New hedge-fund regulations have increased the number of funds that need to register with the SEC. However, even funds too small to fall under SEC jurisdiction need to concern themselves with compliance and operations functions. By Robert A. Green, CPA.
September 2005: Entering and Exiting A TRADING BUSINESS. Trading can be an exciting alternative to a “traditional” job, but there is a lot of hype surrounding the industry - tales of trading riches and happiness abound. That may be true for the lucky few, but far too many traders lose money and have a hard time quitting the business. Knowing when to enter – and when to exit – is as important as any trading lesson. By Robert A. Green, CPA.
May to August 2005: The “Business of Trading” column was on hiatus. We had a very busy tax season.
April 2005: Rethinking taxes. April 15 doesn’t have to be a day to dread. By getting a head start on your tax issues, you’ll be able to rest easy come tax day. By Robert A. Green, CPA
February 2005: Is the Fair Tax a fair tax? If President Bush gets his way, profound new changes to the tax code will be implemented. How will that affect traders? By Robert A. Green, CPA
January 2005: A tip (OR NINE) saves tax money. When it comes to paying taxes, traders can’t afford to play by the same rules as everybody else. Being a trader opens up numerous tax-savings opportuntities, but only if you know how to take advantage of them. Here are nice tips that will help you keep more of what you’ve earned. By Robert A. Green, CPA
August 2004: An alliance effort. A trading alliance could provide individual traders with benefits from tax advocacy to group rates on insurance coverage. By Active Trader Staff. Click here for more information.
June 2004: Many traders work for proprietary trading firms, and many others are considering it. However, too many traders fail to understand the contracts they sign with a firm and wind up getting burned later on. Know what to expect – and what you deserve – before you sign anything. By Robert A. Green, CPA
April 2004: Are you a “BUSINESS TRADER”? Traders are eligible for numerous tax benefits – especially when they elect mark-to-market accounting. But, even if you consider yourself a trader, there’s no guarantee the IRS will agree. This refresher on trader tax status will help you get the benefits you deserve. By Robert A. Green, CPA. This information is included in our “2004 GTT Guide: Trader Tax Law & Benefits.” Click here for more information.
March 2004: BEFORE and AFTER… For traders, there’s still plenty of work to be done before April 15. Before you can even consider filing a return, you need to know where you stand on issues such as tader tax status and mark-to-market accounting. Deal with those concerns now, then file an extension and worry about the tax return later. By Robert A. Green, CPA. This information is included in our “2004 GTT Guide: Trader Tax Law & Benefits.” Click here for more information.
February 2004: Trading for your RETIREMENT..Many traders want to actively trade their retirement plans. For some it’s a bad idea, for others it’s a nice way to benefit from tax-deferred cumulative returns. However, there are limitations to what you can do with a retirement account, so take some time to learn the rules before actively trading your retirement plan. This information is included in our “2004 GTT Guide: Trader Tax Law & Benefits.” Click here for more information.It’s also in our free GTT Resource section, click here.
February 2004: “Out of business. Prop firm shuts down.” Jeff Ponzcak of Active Trader interviewed Robert A. Green, CPA as a source for the story about Woldco’s demise. See Robert’s several quotations in “What traders should know” in the later part of the story. Click here for more information.
January 2004: Work in the FRINGES..Some traders have the opportunity to take advantage of “fringe benefit” plans that can reduce their tax liability. Find out if there’s an arrangement that fits your situation. This information is included in our “2004 GTT Guide: Trader Tax Law & Benefits.” Click here for more information. It’s also in our free GTT Resource section, click here.
December 2003: Year-End TAX PLANNING TIPS.. Although the tax year isn’t over yet, it’s never too early to begin your tax planning. Tax loss selling, converting capital losses into ordinary losses and establishing a Mini 401(k) retirement plan are just some of the things you can do to ease your tax burden before the calendar turns. This information is included in our “2004 GTT Guide: Trader Tax Law & Benefits.” Click here for more information. It’s also in our free GTT Resource section, click here.
November 2003: So you want to be a HEDGE FUND MANAGER…Traders are increasingly interested in hedge funds – not as investments, but as business opportunities. Before you decide you’re ready to manage money, there are some things to consider: How is a fund established? How much regulatory hassle will there be? Read on to find the answers to these and other questions. This information is included our hedge fund section, click here.
October 2003: When it comes to datafeed fees, “non-professionals” pay less, while licensed brokers, registered professionals, and entities must pay more expensive “professional” rates. Traders can avoid the higher fees by understanding the rules and learning to navigate the nuances of this area of the business. This information is included in our “2004 GTT Guide: Trader Tax Law & Benefits.” Click here for more information. It’s also in our free GTT Resource section, click here.
August 2003: “What’s the DIFFERENCE? Besides stocks, traders have a wide range of financial products to trade. In the eyes of the IRS, though, all these products fall into one of two categories: securities or commodities. Why you may think the difference is inconsequential, products classified as commodities have tax benefits securities do not have.” This information is included in our “2004 GTT Guide: Trader Tax Law & Benefits.” Click here for more information. It’s also in our free GTT Resource section, click here.
July 2003: “I promise to love, honor and SAVE YOU TAX MONEY.” Husband-wife partnerships require no formal agreement or paperwork, and they can save you a bundle on your tax returns. This information is included in our “2004 GTT Guide: Trader Tax Law & Benefits.” Click here for more information. It’s also in our free GTT Resource section, click here.
May 2003: Hedging your bets. Hedge funds are a popular investment tool, but many traders might not know how easy it is for them to start their own. A loophole in the tax code not only allows traders who manage a hedge fund or other trading company to keep their trader tax status, it allows them to pass those tax savings on to the investors in the fund.This information is included our hedge fund section, click here.
April 2003: The PROOF is in the Return. Traders have distinct tax advantages over non-traders. By comparing tax returns, you’ll see exactly how much those advantages are worth. And, you’ll see how much extra money you can save by forming a single-member LLC and contributing to a Mini 401(k) plan.
March 2003: THE TAXMAN COMETH. With tax time right around the corner, you should have three priorities: Lowering your tax bill, avoiding a visit from the IRS, and keeping your trade accounting as simple as possible.
February 2003: A special “K.” Both profitable and unprofitable traders should contribute to tax-beneficial retirement plans. A Mini 401(k) plan is ideal for traders, as it gives you the most control over your money. There are other options, though, so determine which plan is best suited for your trading business and set it up early in the year.
January 2003: Eat what you want.. JUST TAKE CARE OF YOUR TAXES. A new year means a new tax season. Make a promise to get a handle on your tax situation as soon as possible, and you’ll save yourself some headaches down the road.
December 2002: “Get a HEAD START on your tax planning. Smart taxpayers do their tax planning before the end of the year, and traders have special circumstances that make year-end tax planning even more paramount. Taking certain steps now can save you a fortune come April 15.”
November 2002: “Simple is Better.” An article on entities for traders including single member LLCs, husband & wife general partnerships and what to watch out for in trader entity tax avoidance schemes.
October 2002: “GET WHAT YOU DESERVE. Are you one of the countless traders who have not received the tax relief granted to you by Congress in 1997? It’s possible that your accountant has let you down – but so has the IRS. Find out what you missed out on, and how your participation in a new advocacy campaign might help you to get your deserved refunds.
September 2002: “TAKING THE STING OUT OF LOSSES. Traders who have trader tax status, use mark-to-market accounting and have a net operating loss can enjoy significant tax savings. See how one trader saved almost $600,000 by taking advantage of trader friendly tax rules.”
July 2002: “Trading is NO HOBBY: While you don’t consider your trading activity to be merely a recreational hobby, watch out! – the IRS might. If you have consistently lost money as a trader, an uninformed IRS agent may try to classify your business as a “hobby” and prevent you from taking your full tax benefits.”
June 2002: “Has your trading activity slowed down this year? Watch out! You might lose your “trader tax status” and not get the tax refunds you were planning on.”
May 2002: “The tax differences between stocks and futures become even more apparent when you’re active in both markets. We look at how the IRS handles stock and futures transactions, and what you can do to avoid losing out on tax breaks.”
April 2002: “2001 tax returns for ‘sole proprietor’ traders are due on April 15, 2002 – that’s also the deadline for electing mark-to-market (MTM) accounting for 2002. By filing an extension – and attaching your MTM election to the extension – you’ll get four extra months to learn about trader tax law.”
March 2002**: “Don’t miss out on trader tax breaks. Business tax returns for traders come in many varieties. One size doesn’t fit all, so it’s important to know which one is right for you and your business.”
February 2002**: “Take control of your taxes. Active traders have complex accounting needs, but brokerages generally don’t provide the necessary record keeping or support. Find out about accounting software and quick fixes you can use as tax season kicks into gear.”
January 2002 “Software Screening” of GTT TradeLog. (This is our software program for trade accounting.)
January 2002 Chat Room question and reply by Green: “Give the props their props” Question about proprietary trading firm agreements.
January 2002**: “More is not better. For certain high net-worth traders, using multiple entities for a trading business — including corporations, family partnerships and trusts — may be tax beneficial. However, for most traders these approaches can lead to trouble. Learn how to stay clear of tax-avoidance schemes and how to fix problems when you find yourself in the middle of them.”
December 2001**: “A Solution to a taxing problem. Trading in a C-Corp or LLC taxed as a C-Corp may lead to tax problems such as double taxation or no tax benefits from losses. If you’re in this situation, here’s a clever fix: Use the same types of agreements that proprietary trading firms do with their traders.”
October 2001**: “Read the Fine Print. Some proprietary trading firms may give traders access to money, but not the ability to fully profit from it. Understanding the conditions of your agreement is crucial to your financial health.”
August 2001**: “Blue plate specials. No (tax) free lunch. Is it a good idea to set up your trading business in an income tax-free state? Some traders may think so, but we look at the realities of this arrangement. ”
July 2001 Chat Room question and reply by Green: Are a “Trader in Commodities” trading gains “earned income” subject to self-employment taxation and eligible for a retirement plan contribution.
June 2001**: “Streamline your trading business. Keep your trading business simple. When evaluating business and tax structures for trading in an entity, traders need to consider substance over form. An unincorporated trading business is the best choice for most traders.”
April 2001**: “Home-Office tax deductions for traders. If you’re like most short-term traders, you operate your business out of your home. Find out how to turn your “home shelter” into a tax shelter.”
March 2001**: “Get the tax refund you deserve. Large trading losses from last year can generate large tax refunds for traders who take the proper steps on their 2000 tax returns. Here’s how to do it.”
** You can see excerpts of many of Green’s articles in this special offer from Active Trader Magazine – the ones marked ** above.