If you find yourself owing the IRS more than you can possibly pay, you may be able to settle for a reduced amount through a procedure called an offer in compromise. The IRS doesn’t always agree, however. Among other possible reasons, they may reject an offer in compromise if it appears you dissipated assets, consuming or wasting money that could have been used to pay your debt to the government. In a recent case, the Tax Court ruled that the IRS can treat losses incurred in day trading as dissipation. The result is unusual because people who take up day trading generally do so with the thought that they’ll make a profit, rather than fritter money away. (more…)
Archive for the ‘Trader Taxation’ Category
Tax Court Says Day Trading Is Dissipation
Friday, March 25th, 2011Friday Wrapup
Friday, July 23rd, 2010Tax news of interest to investors came mainly from the courts this week, though the IRS gave paid tax return preparers something to groan about. (more…)
Part-Time Gambler Is Professional
Tuesday, July 20th, 2010In a summary opinion, the Tax Court has found that an individual can qualify as a professional gambler despite pursuing the activity part-time. While the decision doesn’t have precedential value, it should help inform us in determining who qualifies as a professional trader. (more…)
