Can/must a non-grantor trust be considered as having trader status for tax purposes if its trustee manages it that way?

Forum|Forum|9 months ago
September 11, 2025
1 reply
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If a trustee to a non-grantor trust is trading in such a way that would ordinarily constitute trader status were they operating as an individual, can/must the non-grantor trust be considered to have trader status for its own tax purposes?

Best answer by M-MTax

The simple answer is "Yes, the qualifications would be the same for trader status".

However, since trusts are most typically investment vehicles, qualifying may draw stricter scrutiny.

M-MTaxAnswer

Level 15

The simple answer is "Yes, the qualifications would be the same for trader status".

However, since trusts are most typically investment vehicles, qualifying may draw stricter scrutiny.

user17575517956Author

Level 2

Is it qualifying in and of itself that might draw such scrutiny, or would it be in some way acting upon it, if that is even optional (I don't know)

M-MTax

Level 15

No. It is you who state that the qualifications have been met (by the manner in which you report), which the IRS may then challenge (or not).

Can/must a non-grantor trust be considered as having trader status for tax purposes if its trustee manages it that way?

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