I don't have the resources to research court cases. Visiting a professional tax advisor who has the ability to research and compare/contrast court cases and advise you on your particular circumstances is probably the best route to follow.
In the brief research I did, it would seem that the courts look to the trading of stocks as the source of income. Holding stocks for appreciation and looking for any interest/dividend income appeared to be negative factors for trade or business activity and indicated activity of investor.
It appeared to me that full time trading;
looking for income based solely on very short time frame between buy/sell sell/buy and due solely to market fluctuations;
looking to the trading activity for sole source of income
were/are key factors for making the activity as a trade or business.
All though not directly applicable, the rules for 26 USC 183 and the regulations under Section 183 would appear to be useful to review and to help guide a trading activity from investor to trade or business. Some of the factors are the same.
However, there are a plethora of court cases under Section 183....and the decisions appear to be all over the spectrum. Very, very much a facts and circumstances under Section 183.
**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**
