Hello,
In 2023 I placed many trades--over 1000--and mainly focused on short-term swings in the market.
After tax loss harvesting however, about half my income was dividends / interest and not trading.
Can I claim trader tax status if I receive half of income from dividends / interest but otherwise meet the criteria?
Thank you.
Being a trader depends on the facts and circumstances for each individual. There is no definitive definition of
who is a trader and who is an investor. See if you meet the criteria below:
To be engaged in business as a trader in securities, you must meet all of the following conditions:
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.