Robinhood business I lost money over 15,000

[Vanessa A · Accepted solution]

When you say Robinhood business, are you a day trader or a casual trader or it had nothing to do with stock and it was the name of your business?

If this is a business you have named Robinhood or if you meet the definition of a day trader (not just call yourself a day trader...see below) then you would report your income and losses on Schedule C.  Your losses would be deductible in the same manner that other business income is deductible. 

If you are a casual trader, did you sell the investments or did you just see a decrease in value.  If you sold them and realized a loss of $15,000, you can use the loss to offset other capital gain losses. If you simply saw a decrease in the value, but you did not sell, then you cannot do anything with the loss until you sell. 

"To be engaged in business as a trader in securities, you must meet all of the following conditions:

• You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation;
• Your activity must be substantial; and
• You must carry on the activity with continuity and regularity.

The following facts and circumstances should be considered in determining if your activity is a securities trading business:

• Typical holding periods for securities bought and sold;
• The frequency and dollar amount of your trades during the year;
• The extent to which you pursue the activity to produce income for a livelihood; and
• The amount of time you devote to the activity." 

[Mike9241 · Accepted solution]

a trader (as opposed to an investor) has an option

don't make the 475(f) election - expenses go on schedule c but security transactions go on schedule D and are subject to the wash sale rules

make the 475(f) election. must be made by the original due of the return for the year before the election is to  take effect ( i.e, file by 4/15/2022 for it to be effective in 2023)

the expenses go on schedule c., security transactions are reported on 4797 as ordinary income - no wash sales but you have to adjust your gain or loss for the year by the difference between the cost basis of the securities and their year-end market value - so unrealized appreciation will add to your income while unrealized deprecition will reduce it.  the 475(f) election is the mark to market election