How To Set Up A Trading Business For Optimal Tax Savings

12 Jun

Jun 12, 2020 at 12:00 pm EST


If you are eligible for “trader tax status” (TTS), consider setting up a trading business to maximize tax benefits.

  • Learn how to qualify for and claim TTS.
  • An individual with TTS can deduct business expenses, startup costs, and home-office expenses on a Schedule C, with no entity required.
  • With TTS, an individual can elect Section 475 MTM accounting for 2020 with the IRS by July 15, 2020. Section 475 trades are exempt from wash sale loss adjustments on securities, the $3,000 capital loss limitation, and 475 income is eligible for a qualified business income (QBI) deduction. You can carryback a 2020 NOL/475 loss five years under the CARES Act.
  • A TTS trader uses an S-Corp to deduct health insurance premiums and a Solo 401(k) retirement plan contribution up to $63,500.
  • Learn different TTS entity formation strategies and whether to form an LLC taxed as a disregarded entity, partnership, or S-Corp.
  • An investor without TTS cannot get any of these tax benefits.

Join Robert A. Green, CPA, of for this valuable 90-minute presentation.

Webinar hosted and recording produced by Interactive Brokers. Everyone is welcome; you don’t have to be a client of IB.





I have been trading futures for 2-3 years with the goal of establishing this as a business. To date I have substantial tax losses. I contacted Robert Green to discuss the tax aspects of my futures trading. Robert clearly explained the laws on claiming trader status and provided helpful advice on how to best take advantage of the tax laws based upon my trading. He provided specific advice on how to claim trading losses as an ordinary deduction and why trading as a general partnership would be helpful. I am very pleased to have the expertise of Robert and his company to handle my tax return in 2013 and into the future.