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Free tool · Trader Tax Status

Do I actually qualify for Trader Tax Status?

There's no bright-line test — no minimum number of trades, no magic threshold. TTS is a facts-and-circumstances call the IRS and the courts weigh case by case. So I won't hand you a yes/no. Answer honestly and I'll give you a factor-by-factor read on which way your activity leans, and where the §475(f) election fits.

I trade systematically myself, so I'll say this plainly: for a lot of people the honest answer is "this is investing, not a trade or business," and that's a perfectly good place to be.

How often do you trade?

Courts look for frequent, substantial trading — often many trades on most days the market is open. Occasional trading points away from TTS.

How long do you typically hold a position?

TTS traders seek short-term swings — positions held minutes to days. Holding for months/years is investor behavior, not trader.

How much time do you spend on trading activity?

Substantial time — researching, trading, and managing positions — supports a trade-or-business. A few hours a week generally does not.

How regular and continuous is the activity across the year?

The activity must be regular, continuous, and substantial — not sporadic bursts around a few events.

What are you primarily trying to capture?

TTS is about profiting from short-term market movements — not dividends, interest, or long-term appreciation (that’s investing).

Is trading run like a business / a primary income source?

Running it like a business — with the aim that it’s a livelihood — supports TTS. A side activity alongside a full-time job cuts against it.

Your answers never leave this browser. Nothing here is sent anywhere, saved, or attached to your name — the read below is computed on your device.

Answer the questions above and your factor-by-factor read appears here.

Educational indication only — TTS is facts-and-circumstances, not a formula; content current as of 2026-07-05.

The §475(f) mark-to-market election

These are the questions I'd ask you across the desk, answered honestly — because if TTS looks close, this election (and its deadline) is the next thing that matters.

What is it?
A trader in securities can elect “mark-to-market” accounting under IRC §475(f). At year-end, open positions are treated as sold at fair value, and gains/losses become ordinary.
Why traders elect it
  • Wash-sale rules no longer apply to your trading — the disallowances that plague active traders disappear.
  • Losses are ordinary and not capped at the $3,000/year capital-loss limit — they can offset other income.
  • Trading expenses are business expenses.
What you give up
  • Gains are ordinary income — you give up preferential long-term capital-gains rates (though genuine traders rarely hold long enough to get them).
  • The election is generally irrevocable without IRS consent.
  • You must segregate any long-term investment positions so they keep capital treatment.
  • A change of accounting method (Form 3115) is required the following year.
Hard deadline
The election is deadline-driven — and the date is unforgiving

For an existing individual taxpayer, the election statement must be filed by the ORIGINAL due date (no extensions) of the return for the year BEFORE the election takes effect — generally April 15 of the election year. New taxpayers/entities: within 75 days of formation.

Miss the date and you generally wait a full year. This is the trap: the election for THIS year was due last spring.

If this looks close, let's talk before the deadline.

TTS and the §475(f) election are high-stakes and deadline-driven — miss the date and you generally wait a full year. I trade systematically myself, so I understand the mechanics from both sides. If your read above is anything but clearly "unlikely," it's worth a real conversation.

Step 1 · Email me and I'll follow up

This sends me only your email — never your answers or the score above. It's how I reach out to walk through whether TTS and §475(f) fit you.

Step 2 · Want it worked against your real records?

This free tool is a directional read on what you typed. To have me evaluate your actual trading history and returns, I'll send a secure consent to sign under IRC §7216 first — then you share records, and I take it from there.

Book a consult

This is an educational indication, not tax advice, and does not create a client relationship. It is not a determination of Trader Tax Status — no such determination can be made from a few answers, because TTS is a facts-and-circumstances question with no bright-line test. Content current as of 2026-07-05. For your specific situation, book a consult.