You do not need to have an llc to qualify as a trader. You need to have over 4 trades per day for at least for days per week for the entire year. You are then considered a sole proprietor trader and can deduct expenses for your business.
To do so....
Put expenses on schedule C.
Lets say expense equal 10k on your schedule C
Put a line item at the end of it for -10k and a footnote that explains you are carrying over the 10k to schedule D.
then put a -10k trade at the end of schedule D with a footnote that explains this was the carryover from schedule C. Thus the expenses are 0'd out on schedule C and come off your your schedule D capital gains.
Regarding the losses. I have no idea about the 2 out of 5 year thing. I doubt it but maybe.
I know you do have to you have to have market to market to have any capital losses over 3k.
