Trading and U.S. tax policy quotes...
Supply and Demand of marketable securities: Shares are shrinking by
about $70B or $80B a month between actual buy-backs and cash takeovers
of public companies. We have $25B on average of
new offerings, so the float shrinks by about $45B a month.
As long as owners of stock have more money chasing fewer shares... the market's up. - Charles Biderman, TrimTabs Investment Research
I think there is a real possibility there is a pause in the Taper this
year, maybe sooner, than later. Which again is an indication as to why
maybe rates have come down, If there's weak jobs numbers beyond even
this weather related, if we want to call it that, the Fed's coming the
the rescue. - Scott Martin, United Advisors
I think this Market is ready to Rip! ...and that's only because
I'm speaking to foreign investors and they're looking at the world and
saying the U.S. is the safest haven right now. -
Maria Bartiromo (3/6/14)
If for some reason the market breaks out
from these channels, the market could head up in parabolic fashion which
could lead to a massive run up that could last a month or two. That is
the good news; the bad news is that parabolic moves never have a happy
ending as we saw in March of 2000. - From a
Proprietary Market Report (3/6/14)
Raise cash now. I expect a huge selloff in equities. But do not short
the market because it could go higher in the short-term. -
Mark Spitznagel (3/4/14)
Based on my study of demographics (which includes the ongoing
retirements of the Baby Boomers) the Dow Jones Industrial Average will
to rally to 17,000 in several weeks, followed by a downward slide or
crash that ends in 2016 at Dow 6440 - Harry S. Dent (3/3/14)
MyRA savings accounts will be developed to be offered through employers
to those employees with family income no greater than about $191K. The
deposits into the myRA are not tax deductible, but the growth in the
myRA is tax-free. Once the balance in the myRA reaches $15K it needs to
rolled into a Roth IRA. The myRA accounts are a very low-risk investment
in dollar-constant U.S. Gov't backed securities
- Pres. Obama State of the Union speech (1/28/14)
Effective March 1, 2014 any entities with an EIN that file tax forms
1065, 1120 and so forth and even some Schedule C filing businesses are
required to file IRS
8822-B within 60 days of a change of address or identity "of the
responsible party" or a change of the address or location of "the
- IRS instructions for form 8822-B
There will be some sharp pullbacks in the
market. The first decline will probably be a 10% to 15% decline and we
think very likely to happen in the next six to nine months.
- Joe Duran, United Capital Financial Advisors
Net Investment Income Tax CAUTION for traders and some other taxpayers for 2013 tax returns:
Perform this simple test - Add up just the positive amounts on your tax
form 1040 lines 7 through 21 and if this sum exceeds $200K for singles
or $250K for marrieds, then manual computations may need to be done to
override standard tax return preparation software computations. And
as a further CAUTION, to the extent there was any netting of losses or expenses to
arrive at a given amount listed above, redo this test by eliminating those losses or expenses
and see if the new summation then exceeds the $200K or $250K level.
Once a taxpayer exceeds this level of positive income, the Net Investment Income Tax
for 2013 may apply. And then to make matters a bit more complex, there is a
taxpayer's choice: either the old proposed rules from 2012 or the new
final rules for 2014 may be used for the necessary 2013 computations.
Please search this page for "1411" and using the Google search above
search this web site for "1411" to find additional information.
- Internal Revenue Service (FAQ)
Retail stock brokerages will be reporting publicly traded
option gain/loss computations to the IRS beginning with positions opened
after January 1, 2014.
- Internal Revenue Service (effective 1/1/14)
The International Monetary Fund is raising its forecast for U.S.
economic growth after Congress struck a budget deal and the Federal
Reserve said that it would begin to taper. We see a lot more
certainty for 2014, so all of that gives us a much stronger outlook for
2014, which brings us to raising our forecast.
- Christine Lagarde,
IMF Managing Director (12/22/13)
I've watched this stuff for 40, 50 years now, and this the first time in
my memory when it seemed to be official U.S. Gov't policy that the stock
market goes up. And the Fed likes this, because it thinks that
when the stock market goes up people who own stocks feel richer; they'll
go out and spend more money and the unemployment rate will come down.
- Richard Sylla, NYU Stern Markets Historian (12/21/13)
We are in a legitimate bull market because for the first time this
century, we have all five of these in place: 1) Major issues in the news are
resolved positively 2) Profits are bountiful 3) Companies create value,
such as increasing dividends and declaring stock splits 4) Job market
improves 5) No inflation.
- Jim Cramer (12/20/13)
We like MA and VISA, but you have to remember that these are a hedge
against our undisclosed short portfolio of other payment processors, who
we think are on the wrong side of the technology curve. Overall
the risks are rising and we're finding a meaningfully larger amount
opportunities on the short side at the end of 2013 than at anytime since
- Jim Chanos, Kynikos Assoc. (12/19/13)
Tapering to begin at a modest pace at this time. $75B rather than $85B
per month. The Fed rate for interest will remain unchanged at
least until "well past" a date when the jobless rates have dropped below
6.5%. - Fed Chairman Ben Bernanke (12/18/13)
The stock markets initially crashed, followed by a stunningly strong
rally minutes later.
The top 40% of U.S. taxpayers paid 106% of the nation's tax burden for
2010. It could be said that contrary to many pundits, the rich
not only pay their full share... but they actually pay everyone's share.
- Congressional Budget Office
report issued in December 2013
This is the most extreme monetary policy we've had in 100 years. It
doesn't make sense with the employment rate coming down ... to keep
extreme measures in place. Logically the Federal Reserve ought to begin
to reduce bond purchases at its meeting next week.
- David Kelly, J.P. Morgan Funds Chief Global
Interest rates will go rapidly up to 4% and then as
high as 6% if the tapering is actually consummated and
that's why I believe there will be no consummation of the tapering.
Therefore invest in anti-dollar investments as the dollar goes much
lower due to a failed tapering.
- Michael Pento, Pento Portfolio Strategies
Bureau of Labor Statistics,
Employment Situation for November's new hires could be well above
consensus. I am expecting a 210,000 to 230,000 rise in employment.
- Billy Greenblatt, Sterling Infosystems
When the Fed taper happens (most likely during the first quarter of
2014) the market will be set-back 5%. At that time - buy equities (but
do not touch bonds). If the taper results in panic and the 10-year
Treasury yield goes up to 4%, the U.S. will enter a recession.
- Jim McCaughan, Principal Global Investors
Very lengthy final IRC §1411 regulations for 2014 (T.D. 9644
REG-130843-13) cover the
3.8% Affordable Care Act related investment tax / trader tax
IRC §1411. The final regulations adopt, after a
number of changes,
the 2012 proposed regulations
REG-130507-11. For the
transition year, 2013, taxpayers may generally use (within reason) either set of
regulations as long as they do not "inappropriately distort" the intent
of the law for tax years after 2013. Trader expenses are
more-or-less fairly re-configured in a way that for most traders will
offset 3.8% of tax but are prevented from any tax benefit that would
result in any so-called double-dipping. The new rules are complex
and will necessarily require manual overrides and manipulation of tax
return preparation software. - www.irs.gov November 26, 2013
IRS crack-down on self-directed IRAs - Form
5498 for 2014 differs from the
form in order to prepare trustees for a future requirement to
separately report the value of nonpublicly traded investments, including
closely held LLCs and real estate. This information will provide the IRS
with potential audit issues to go after. Mortgage Interest form
1098 is going to be changed to report the loan balance, origination date
and property taxes paid to help IRS determine when a taxpayer is
over-deducting on home equity lines over $100K and original mortgage
debt over $1MM. - www.irs.gov November 2013
The Wealth Effect (a greater perception of wealth results in more
spending, which often results in a more rapidly growing economy) has not
returned to the levels of the pre Housing Crash days. Therefore not all
of the 2013 gains in the stock market and in housing are being spent,
and so that leads me to believe that the Fed Policy is harming savers
and is holding back a couple percent of GDP. But I am not
convinced that the Fed will ever taper; we may just go into the next
crisis, depression... (Long MU and TPX, short GMCR and CMG)- David Einhorn, Greenlight Capital
Odds of being audited:
Will the 2013 Fed Policy be reversed, possibly beginning with tapering
in early 2014? A. No, while the Fed may try to
test the waters from time-to-time, if interest rates were to rise
appreciably higher, then the U.S. economy would either go into
hyper-inflation (if Congress rapidly accelerates needed high interest rate
borrowing to cover the higher interest cost) or would go into a depression and in an extreme case
would revert into potential anarchy (if Congress curtails borrowing and
spending). Reasoning: If interest rates rise even by a few percentage
points, that could result in a doubling or tripling of the U.S. debt
service costs. With that much allocated to covering debt service
there would be significantly less available for discretionary spending and even
for some other so-called mandatory spending (Medicaid, SNAP, U.C., etc.).
Therefore, to avoid these apocalyptic risks, the Fed is trapped into
maintaining low interest rates for the foreseeable future.
- TraderStatus (11/21/13)
It's imperative that the Fed begins to taper. We've seen real
bubble-like markets again.
- Larry Fink, BlackRock, world's largest money management firm
If short-term interest rates exceed the 10-year bond yield (Inverted
Yield Curve) this would indicate a turn into recession.
Monetary Policy, Economic Cycle, Valuation & Sentiment are at 70% (of my
proprietary formula) showing that the S&P is undervalued by 15%.
- Elaine Garzarelli (10/10/13 with S&P at 1690)
The 2013 holiday season is going to be horrific for the department
stores; for the apparel retailers. AAPL, KORS UA, NKE and TJX are going to take a lot of dollars out of other
retailers' pockets. A new paradigm: when you take AAPL, Samsung, WMT
and AMZN they are taking more than 50% of the growth in retail and
that's going to accelerate as you get into the 2013 year-end holiday season.
- Steve Kernkraut, Durbar Capital (10/10/13)
Crude oil volatility peaks approximately every 32.3 months (roughly in
two to three year cycles). It is now 31 months since April 2011
when the WTI-Brent price variance spiked - and that was 32 months after
a major round of volatility that topped out in July 2008. If the oil
price volatility is oscillating in a repeating two to three year cycle,
then we can expect to see another wave of instability in oil prices
occur in late 2013 or early 2014.-
Tom Therramus (10/7/13) After (or with) recent declines in WTI,
the volatility has begun and many stocks such as EOG, PXD, VLO & XEC
seem to be following the action [real
time price of WTI].
- Joe Granville, (RIP 9/7/13)
Be fearful when others are greedy... and
greedy when others are fearful. - Warren Buffett
The average investor in the market is a blind man crossing the
street. He can’t compete with professionals. -
Trees don't grow to the sky. - Louis Rukeyser
There is only one side of the market and it is not the bull side or
the bear side... but the right side. - Jesse
To me, the tape is the final arbiter of any investment decision. I have a cardinal rule: Never fight the tape!. -
A person can succeed at almost anything
for which they have unlimited enthusiasm. -
It always seems impossible ... until it is done.
Never go on margin until you have
mastered the market, charts and your emotions. Margin can wipe you out.
There are two systems of taxation in our country: One for the informed
and one for the uninformed. - Judge Learned Hand
There should be tax increases. Speaking personally, I think there are a
lot of very rich people out there whom we can tax.
- Sen. Barney Frank (youtube)
Collecting more taxes than is
absolutely necessary is legalized robbery. - Pres. Calvin
The most dangerous thing you can
do to any businessman in America is to keep him in doubt, and to keep
him guessing on what our tax policy is. - Pres. Lyndon B
Our tax code is so complicated,
we've made it nearly impossible for even the Internal Revenue Service to
understand. - Treas. Paul O'Niell
I have wondered at times about what the Ten
Commandments would have looked like if Moses had run them through the
- Pres. Ronald ReaganThe only
thing that saves us from bureaucracy is its inefficiency.
- Sen. Eugene McCarthy
Looking for tax
trading is fast... exciting...
profitable... challenging... and tax deductible!
When you tally up your results each year - do you see the
capital gain tax taking away too much from your hard won trading profits?
As an active trader do
you find that you have too little time at the end of the day
to do the necessary tax planning to avoid paying excessive income taxes?
What is the real story behind all the talk about the tax benefits from
choosing trader status and electing mark to market?
When is a CPA firm needed?
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Here at TraderStatus.com™ we will bring together in one place the
information necessary to help you survive unnecessarily high short-term
capital gain taxes, self-employment taxes and state and federal income
taxes. To accomplish this, often a separate trading entity is the
answer, but just as often we avoid it as not being cost effective in a
Many traders do
not yet even realize that they are paying far too much to
the Federal Government. Existing, proven legal
procedures, which in many cases can significantly reduce
taxes each and every year, are available to anyone
qualified to elect to use them.
As we all
eventually learn, those low capital gain tax rates of
15% or lower are not available for the daytrader's lightning fast trading profits. Rather,
an individual daytrader's gains (or losses) are
subject to the higher ordinary income tax rates!
securities traders may incur substantial costs with
on-line fees, commissions, real-time data-feeds, computer
equipment and so on. The Internal Revenue Service, on
their own, do not treat most taxpayers very fairly when
it comes to deducting these expenses. Leaving it up to
the IRS publications and instructions, at best, a
taxpayer must first qualify to itemize his deductions on
Schedule A - making those deductions subject to a 2% of
Adjusted Gross Income (AGI) reduction and for some high-income taxpayers even an additional 3% of AGI reduction.
Please take the time to read and understand the information found on
our web site and also on the Discussion Board
as it can be very helpful to you when preparing your taxes and when
planning your tax strategies. Every month we hear from taxpayers
who found this web site too late or after they already paid someone
for a download that contained nothing more than the basic information
here available to you for free. Taxpayers who were ill-advised by normally very competent CPAs and other tax practitioners,
but for whom the tricks and traps
of Trader Status were unknown to them.
A good CPA does not need to know everything, he only needs to know
where to look it up when a problem arises, or when he's doing your tax
planning. Unfortunately the hard facts are that, when it comes
to traders in securities and traders in commodities, many tax advisors have
no clue that there even is a Trader Status issue to look up, let alone
having the practical hands-on experience necessary to be aware of the tricks and traps
to be found!
Proposed IRS Regulation 1.1411-5 targets gains from securities
traders, futures traders and forex traders
for imposition of the 3.8% surtax.
IRC §1411 - November 30, 2012
1:8 taxpayer earning over $1MM were audited in the past year.
1:25 are the odds for individuals earning greater than $200,000.
earning less than $200,000. 1.6MM tax returns were audited, out of
141MM form 1040 returns filed. 8 out of every 10 audits resulted
in additional taxes being assessed. Corporations: 1:100 odds for
those with assets under $10MM.
derived from IRS announcement, January 5, 2012
For 2014 as has been the case starting with 2011, taxpayers with any financial account maintained by a foreign
financial institution or any securities issued by someone that is not a
U.S. person may be required to file IRS Form 8938 along with their
regular income tax forms. Taxpayers are subject to a $10,000 late filing
penalty and the burden of compliance for some European
institutions is too expensive and will result in
closing accounts held by U.S. citizens.
derived from IRS announcements, January 2012