Ask a CPA

The IRS does not require that brokerage firms report options sales on form 1099-B. The IRS does require brokerage firms to report the assignment or exercise of options if cash is received as a result of the assignment or exercise.

Securities Dealers are required to follow the IRS “market to market” rules. Traders may elect to use the “market to market” rules.
If elected, all security gains and losses are treated as ordinary income or loss, and all securities on hand at the end of the year are deemed to be sold at the end of the year at Fair Market Value.
The unrealized gain or loss on a security increases or decreases the basis of the security.
The benefit of making this election is that “traders” can take ordinary loss deductions for short term trading losses that are not subject to the $3,000 per year limit.
Also the “wash sale’ rules do not apply. Taxpayers may make the "market to market" election by attaching a statement to a timely filed return for the taxable year immediately preceding the election year. It is also necessary to complete IRS Form 3115 - Application for change in accounting method.

Yes. The capital gain and loss limitations do not apply to securities of a “dealer”, except for securities held primarily for investment. Nor do they apply to real estate sales by a dealer in realty, except for property as an investment. A “trader” is distinguished from a “dealer” in securities is subject to the capital gain and loss limitations. A securities “dealer” is similar to a merchant in that he purchases securities with the expectation of reselling them for a profit. The profit is based on hopes of finding a market of buyers to purchase the securities in excess of his cost. A “trader” buys and sells securities for his own account. A trader’s expectations of making a profit depend on the rise in value to sell at a price in excess of cost. More details can be found in IRS Publications 544 and 550 found at http://www.irs.ustreas.gov/prod/forms_pubs/forms.html

The capital gain and loss limitations do not apply to the securities of a “dealer”, except for securities held primarily for investment. Nor do they apply to real estate sales by a dealer in realty, except for property as an investment.
A “trader” as distinguished from a “dealer” in securities is subject to the capital gain and loss limitations.
A securities “dealer” is similar to a merchant in that he purchases securities with the expectation of reselling them for a profit.
The profit is based on hopes of finding a market of buyers to purchase the securities in excess of his cost. A “trader” buys and sells securities for his own account.
A trader’s expectations of making a profit depend on the rise in value to sell at a price in excess of cost. More details can be found in IRS Publications 544 and 550 http://www.irs.ustreas.gov/prod/forms_pubs/forms.html

The biggest benefit for a business with a Simple IRA plan is that it provides a very easy way to provide an employee retirement option without all the technical complications of 401Ks and similar account plans. Second, the establishment and maintenance costs to run a Simple IRA plan are a big plus for the cost-conscious business. Additional benefits include No special plan-level tax reporting is required for the employer annually. No discrimination testing is necessary. There is no requirement on the employer to track vesting. All contributions are immediately 100% vested (at the point of deposit the employee owns the full amount in the retirement account without any time delay).

The biggest benefit for a business with a Simple IRA plan is that it provides a very easy way to provide an employee retirement option without all the technical complications of 401Ks and similar account plans. Second, the establishment and maintenance costs to run a Simple IRA plan are a big plus for the cost-conscious business. Additional benefits include No special plan-level tax reporting is required for the employer annually. No discrimination testing is necessary. There is no requirement on the employer to track vesting. All contributions are immediately 100% vested (at the point of deposit the employee owns the full amount in the retirement account without any time delay).

A Roth IRA is a special non-deductible IRA. Even though you contribute to the account with your after-tax dollars, all withdrawals are tax free if you meet the following conditions: you are at least 59 and a half and an account has been in existence for at least five years.
In other words, you will never pay any taxes on earnings that your IRA fund will generate after turning 59 and a half. There are no mandatory minimum distributions at age 70 and a half, as in the case of a traditional IRA plan.
This feature allows passing on more savings to your beneficiaries if you wish to do so. You can withdraw money from your Roth IRA at any time without paying taxes up to the amount of your contributions. Dipping into the earnings will have no tax consequences.
There is no age limit on contributions. Every person with earned income, within limits established by the IRS (in general, your modified adjusted gross income must be less than $110,000), is eligible to open a Roth IRA.
For this purpose, the IRS considers as earned income wages, salaries and money made from being self-employed. Other income is considered passive (dividends, interest, rental properties etc.) and cannot be used to fund a Roth Individual Retirement Account.

A Roth IRA is a special nondectible IRA. Even though you contribute to the account with your after-tax dollars, all withdrawals are tax free if you meet the following conditions: you are at least 59 and a half and an account has been in existence for at least five years. In other words, you will never pay any taxes on earnings that your IRA fund will generate after turning 59 and a half. There are no mandatory minimum distributions at age 70 and a half, as in the case of a traditional IRA plan. This feature allows passing on more savings to your beneficiaries if you wish to do so. You can withdraw money from your Roth IRA at any time without paying taxes up to the amount of your contributions. Dipping into the earnings will have no tax consequences. There is no age limit on contributions. Every person with earned income, within limits established by the IRS (in general, your modified adjusted gross income must be less than $112,000, The phase-out range is $112,000 to $127,000 for married couples filing jointly and from $173,000 to $183,000 for non MFJ taxpayers except MFS which is $ between $0 and $10.000), is eligible to open a Roth IRA. For this purpose, the IRS considers as earned income wages, salaries and money made from being self-employed. Other income is considered passive (dividends, interest, rental properties etc.) and can not be used to fund a Roth Individual Retirement Account.

Some advantages of a SEP Simplified Employee Pension Plan are: Contributions to a SEP are tax deductible and your business pays no taxes on the earnings on the investments. You are not locked into making contributions every year. In fact, you decide each year whether, and how much, to contribute to your employees’ SEP-IRAs. Generally, you do not have to file any documents with the government. Sole proprietors, partnerships, and corporations, including S corporations, can set up SEPs. You may be eligible for a tax credit of up to $500 per year for each of the first 3 years for the cost of starting the plan. Administrative costs are low.

Some advantages of a SEP Simplified Employee Pension Plan are: Contributions to a SEP are tax deductible and your business pays no taxes on the earnings on the investments. You are not locked into making contributions every year. In fact, you decide each year whether, and how much, to contribute to your employees’ SEP-IRAs. Generally, you do not have to file any documents with the government. Sole proprietors, partnerships, and corporations, including S corporations, can set up SEPs. You may be eligible for a tax credit of up to $500 per year for each of the first 3 years for the cost of starting the plan. Administrative costs are low.