OptionsTaxGuy

A Trader in Securities reports trading expenses on Form 1040 Schedule C. The only trick to reporting on Schedule C is the home office deduction which must be reported as an "Other expense" but clearly described as, for instance, "Home office for Trader in Securities". This is necessary because the home office deduction is not applicable if the Schedule C shows a loss. Additionally, if your trading for the year results in a net loss, the home office deduction should not be entered.

Yes; You need to open two or more accounts and designate one as an investment account and the other(s) as trading accounts. Place notes in your permanent tax file describing the intention of each account

This may occur because the year-end statement is based on settlement date and not trade date, which is what triggers tax. Check your Form 1099-B to make sure it is reported on that form. If not, add it to your Form 8949. Remember to exclude it the next year.

I heard an un-informed individual at an options conference where I was speaking who told another conference participant that he just "formed an LLC and deducted everything." During my presentation I made sure to inform all in attendance that this was absolutely not the case. Forming an entity does not magically create expenses. You can deduct the formation costs and it may be easier to implement some benefit plans but compliance costs and state minimum taxes may impact the decision.