if you do not have TTS the IRS regards you as an investor. it does not matter that the activities are carried out through an LLC. trading gains and loss are capital in nature and expenses, except for investment interest expense (form 4952/ Schedule A), are not deductible on either schedule A or C.
if you want to qualify as a trader you must meet these criteria
You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation;
Your activity must be substantial; and
You must carry on the activity with continuity and regularity.
The following facts and circumstances should be considered in determining if your activity is a securities trading business:
Typical holding periods for securities bought and sold;
The frequency and dollar amount of your trades during the year;
The extent to which you pursue the activity to produce income for a livelihood; and
The amount of time you devote to the activity.
if you think you'll qualify for 2022 the 475(f) election must be made by 4/15/2022 (unless extended) either with your return or with an extension. make sure the documents get a timely postmark. late elections are denied.
