Trader Tax Law: 2021 Mid-Year Update

Presentation slides

Join Robert A. Green, CPA of GreenTraderTax, for tax developments impacting traders, including entities, a SALT cap workaround, and President Biden’s tax hike proposals on investors.

• A new entity qualifying for trader tax status (TTS) can elect Section 475, providing an exemption from wash sale loss adjustments, the $3,000 capital loss limitation, and eligibility for a 20% QBI deduction. In addition, an S-Corp can deduct health insurance premiums and a high-deductible retirement plan like a Solo 410(k). Mid-year is an excellent time to consider a new TTS entity,
• An entity might offer a SALT cap workaround to circumvent the $10,000 limit on state and local itemized deductions.

Biden’s tax proposals in Treasury’s FY 2022 Greenbook curtail long-term capital gains for taxpayers making over $1M and closes the carried interest tax break for fund managers earning over $400,000. However, Biden’s Greenbook does not offer to remove the contentious SALT cap, and it retains the 20% QBI tax deduction. In addition, it does not propose a financial transaction tax.

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