An IRS classification for individuals whose trading is frequent, substantial, and continuous enough to be a business, allowing business expense deductions and a mark-to-market election.
Very few crypto or stock traders qualify; the bar is daily trading as a full-time activity. Those who do can deduct expenses on Schedule C and, with a section 475 election, avoid capital loss limits.
Not by itself; gains stay capital. The section 475 mark-to-market election is what converts them to ordinary and removes the $3,000 loss cap, and it has to be made in advance.
Last reviewed September 15, 2026. Tax rules change; confirm current law before acting.
A confidential consultation. Tell us what you have, and we will tell you what applies and what it costs.
Hourly billing, estimated up front, with a deposit applied to the work.
Fill this out and we will reach out to schedule your consultation.
