It depends if you are considered an investor, dealer, or trader.
- Investors typically buy and sell securities and expect income from dividends, interest, or capital appreciation. They buy and sell these securities and hold them for personal investment; they're not conducting a trade or business.
- Dealers in securities may be individuals or business entities. Dealers regularly purchase or sell securities to their customers in the ordinary course of their trade or business.
- Special rules apply if you're a trader in securities, in the business of buying and selling securities for your own account. The law considers this to be a business, even though a trader doesn't maintain an inventory and doesn't have customers.
For specific requirements to determine which category you fall into, please see IRS Topic No. 429 Traders in Securities (Information for Form 1040 or 1040-SR Filers).