Whether you qualify as a TTS is a question of fact. Let's assume that you do. If you have not made the election under Section 457 for mark-to-market accounting, then as a trader in securities, all of your gains and losses are capital gains and capital losses. Those capital gains and capital losses get reported the same way they do for investors, namely Schedule D and/or Form 8949. Because they are capital gains and capital losses, the same rules apply namely, losses offset gains plus $3,000 of ordinary income. Remaining losses are carried over to future tax years. The wash sale rule also applies. Traders in securities do not pay self-employment tax.
As a trader in securities, all expenses associated with that business are reported on Schedule C. The Schedule C will only contain expenses and no gross receipts or sales because the capital gains and capital losses have already been reported on Schedule D and/or Form 8949.
A different analysis applies if the trader has made a valid and timely election pursuant to Section 457.
@MilZero
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