Futures trading costs through prop firm acct purchases

[sky011]

If someone day trade futures with prop firms, Apex, Topsteps etc.  Are they able deduct the costs associated with acct purchases and activation fees, etc?  Futrues firms only send 1099-NEC (amount you made)  but not all expenses.

[RobertB4444]

Only if you are recognized as a professional trader by the IRS.  In order to do that you have to derive at least 50% of your total income from trading in securities.  You also have to file a 'mark to market' election with the IRS.  

Here are the rules for professional traders.

If you qualify then you get to deduct the expenses as business expenses.  If you don't qualify then they are investment expenses and investment expenses are no longer deductible under the TCJA.

@sky011