For veteran traders who are well-versed in filing their federal income taxes on July 15th (TODAY), this will be a friendly reminder about the basics.
For aspiring day traders or anybody who has procrastinated on filing their taxes until the very last minute, this information may help you keep a LOT more of your profits! 😉
When you file your taxes as a day trader, it’s not enough to list your total and net gains – and losses – for the previous calendar year. You must ALSO inform the IRS about how you want your gains and losses to be processed for the current year.
Get it right and you can expect some generous deductions. Get it wrong and you’ll end up paying a lot more hard-earned cash to Uncle Sam.
There is a BIG difference between categorizing yourself as an investor or a trader.
- Must have an average holding period of less than 31 days and make at least 720 trades.
- Must be making money by actively and regularly buying/selling in the market (no interest, dividends, or capital appreciation gains)
- Are a business, so they can write off several expenses (Software, educational products, computer equipment, home office purchases, etc.)
- Have gains taxed as ordinary income, so you get taxed at the income bracket you fall into (10-37%)
- Can have all their losses deducted
- Cannot write off more than $3,000 every year (AFTER net gains for the year have been subtracted)
- Have $3,000 capital loss limitation forfeited if they sell a security then buy/sell the same one within a 30-day period
There are certainly many more details associated with either designation, but this information is more than enough to get you started on making a firm decision.
And obviously, your performance will largely dictate which designation is more advantageous from a tax standpoint.
If you’re currently trading or investing, which one would YOU pick and why? Reply to this newsletter with your choice and tell us how you intend to lower your taxes this year!
Delta Airlines Remains Confident in Being the #1 Airline for Business Travelers
Delta Airlines, like every other airline, is facing a lot of pressure in regard to their financial future. Their Q2 2020 revenue is expected to be 25% of what it was in Q2 2019, their daily cash burn will only break even by the end of 2020, and they’re anticipating 20% of their employees to leave the company.
Yet despite these objectively negative metrics, they remain confident in being the top airline for business travelers around the world… even though Delta expects business travel to lag for the next 12-18 months.
This confidence is not without good reasoning. They know that their business clients primarily choose Delta for the generous amount of space provided to them. As they are currently operating their flights at 60% capacity and blocking off the middle seats, they know their competitive viability will be stronger as travel demand gradually rises.
Combined with several countries relaxing their international border restrictions, there will come a time when individuals will resume traveling for business purposes. Eventually, Delta expects corporations to sanction large trips for meetings and conferences.
All of these expectations are reasonable, but it’s quite a stretch to say Delta will be able to retain their position as king of the hill when it comes to business travel. They’re not the only ones eager to serve their most profitable customers…
A $1.5 Billion Deal May Have Saved Virgin Atlantic from Impending Doom
Virgin Atlantic was very recently on the brink of collapse. Without any bailout money from the UK Government, they resorted to liquidating the shares of Virgin Galactic, laying off 35% of their workforce (3,500 employees) and Richard Branson himself has tried mortgaging his infamous Caribbean island.
But a recently signed $1.5 billion deal appears to be the floating water raft the airline needed to prevent themselves from drowning, and hopefully become profitable again by 2022.
Here is how the deal is structured:
- Davidson Kempner Capital Management contributes $213 million
- Creditors will postpone $565 million worth of loans, refinancing them to be paid over the next five years
- Richard Branson will contribute $251 million
This is a do-or-die deal. If this fails to come to fruition, Virgin Atlantic is as good as done for. And Branson’s private island will inevitably have to be mortgaged.
Let’s see how the airline performs over the next two years!
Brand New Lockdown Restrictions for Catalonia
Catalonia, one of the largest autonomous communities in Spain that is home to Barcelona, has experienced a rising outbreak the number of new daily COVID-19 cases and now imposing a new set of lockdown restrictions in an effort to prevent the spread of the virus.
Here are some of the details regarding these rules:
- Hospitals will be greatly limited on the services they can provide
- Public gatherings of more than 10 people are prohibited
- Restaurants can only offer delivery and takeout services
- Citizens cannot travel between towns unless it is for essential purposes
Why now, you may ask? Unlike other areas, Catalonia cannot implement a robust contact tracing program to identify super-spreaders and the people they have come into close contact with.
The outbreak was simply too big and too fast. It can no longer be contained through social distancing, face masks, and many other practices proven to be effective in limiting COVID-19 transmission.
Desperate times call for desperate measures, and that’s exactly what Catalonia is doing. Not surprising when you consider that Spain is one of the hardest-hit countries with respect to the coronavirus.
One Military Soldier Ruined Thailand’s Inbound Flight Schedule
Thailand seemed to have a lot of positive momentum in keeping COVID-19 contained, as the past 50 days have yet to turn up a single reported COVID-19 infection in the country.
They were generous enough to open up their airports for more inbound flights, hoping to restore their damaged tourism industry. And with millions left without a job, Thailand needs all the economic support it can get.
But several Egyptian soldiers seem to have screwed everything up, as all inbound flights have been suspended for the time being.
Not only were they not screened for COVID-19 upon arrival, but they also failed to adhere to quarantine protocol. All they had to do was stay put in a hotel for 24 hours before catching their next flight (they received an exception from the normal 14-day quarantine imposed on incoming foreigners).
Instead, they went to a nearby mall. And as their luck would have it, one soldier ended up testing positive for the coronavirus.
In addition to widespread outrage from Thailand citizens, government officials must now work at breakneck speeds to trace all of the people in the mall and the area surrounding it. In total, you’re talking about 1,700 individuals.
This, my friends, is why we can’t have nice things in life.
Do YOU agree with this decision from the Thailand government? Or are they overreacting? Let us know what you think by replying to this newsletter!
France Sees Light at the End of the Tunnel
France was one of the hardest-hit countries by COVID-19, recording the third highest number of coronavirus-induced deaths in the world. Not to mention, their lockdown restrictions were the strictest in Europe (coming second to Italy). According to the government data, the first six weeks of the lockdown saw a total of 915,000 health-related fines being issued.
But things are starting to look up for France, as May 11th marked the first day of easing lockdown restrictions, and last week saw an official end to the official state of emergency announced by the French government.
Cafes and restaurants are booming with business, as Parisians are eager to resume working and enjoy the small pleasures the country – and the hot summer weather – has to offer. As of right now, they’ve managed to reduce their rate of new daily COVID-19 infections to just 500.
However, many officials are warning about an upcoming phase of economic doom. The French government’s generous employment subsidy programs have kept 50% of workers protected.
Yet these benefits will end in September, and up to 1 million jobs are estimated to be lost. Some employers are eager to announce major job cuts in order to offset their losses since late February.
Either way, now is the time to enjoy France for all it has to offer during these last few weeks of festivities and personal freedom!