EDUCATION CENTER
INTERACTIVE: FREE CONFERENCE CALLS & PODCASTS

Although these sessions are free, informal and often comprised of questions and answers, they are valuable. Ask your questions on the conference call, or by email to info@greencompany.com. Sorry, recordings prior to October 30, 2008 are not available.

Thursdays Conference Calls and/or Webinars, 4:15 - 5:30 pm ET.
Podcast recordings available below.

Join our email list to receive an invitation. Go to the Join Us dialog box on the bottom of this Web page to input your confidential email address. We usually send email invitations a day or two before the events.

Conference Call: Dial 312-878-0224, Access Code: 603-682-315

Hosts: Robert A. Green, CPA/CEO of GreenTraderTax and GreenTraderFunds and Brent Gillett, JD of Investment Law Group of Gillett Walker, LLP.

Special Topics: Vary per week and usually are focused on our current blog articles. They are also included in our weekly bulk email invitations, so make sure to get your invitation by joining our confidential email list below.

General Topics:

• Traders Association (please join to fight the financial-transaction tax);
• Financial-Transaction Tax (a serious threat to all traders);
• Trader Tax, Forex Tax, Entities, Retirement Plans;
• Retirement Plan Strategies & Entities for Traders;
• Investment Management Businesses (current and proposed rules);
• News of the Week (tax and regulatory);
• Tax Changes Coming in 2009 and Beyond (see blog and videos below);
• Year-End Tax Planning (with a 2009 year-end update coming next week);
• Hedge Funds, Incubator Funds, and Registration issues;
• Proprietary Trading Firms;
• and Green Energy Active Investors.

Podcast Recordings Available (click links below)

Just below are links to our recent conference calls. You may click the link to play directly from here, but bear in mind that the action performed is dependent on settings in your browser. You may also RightClick the link to save to your computer for playing in Windows Media Player, QuickTime, or iTunes. These are MP3 files and may be conveniently saved to an iPod or other MP3 device for listening while driving or riding in the train or plane. You can also stream the podcasts on our facebook page.

Mar. 11, 2010 Podcast
Windows Media Player file (31.8 MB 75:00 length)

00:00 – Technical glitch in starting the call, so skip to 01:30. We solved some of Robert’s mic problems from last week and this recording is much better. We expect to make it even better for next week.

01:30 – Green’s opening remarks.

02:10 – Brent Gillett discussed financial-reform changes.

03:30 – Question on tax treatment for currency futures. Green answers. Also see Green’s March 9, 2010 Forex Tax Webinar for FXCM and MoneyShow videos accessible on our Forex Tax page at http://www.greencompany.com/EducationCenter/GTTRecCurrency.shtml

07:35 – Question about dual-entity schemes which Green wrote about recently on his blog at http://www.greencompany.com/blog/index.php . This attendee was worried about tax problems and whether or not he wasted thousands of dollars on these schemes. Green answers in full with a long answer.

21:00 – Follow-up question about dual-entity schemes. Attendee doesn’t think he qualifies for trader tax status and therefore his dual-entities schemes may be a problem for him. Green suggests solutions including shutting down the entities he doesn’t need and amended tax return filings. We can help, but it may cost you back taxes, interest and penalties in some cases if you want to clean it up right.

27:20 – Question about using a current single-member LLC housing a real estate business for a new trading business too. Green suggests a separate new entity dedicated to a trading business only. Combining business activities within one entity can dilute trader tax status in the eyes of the IRS.

30:50 – Follow-up question about the best entity to choose for a trading business. Green suggests husband and wife general partnerships or LLCs for married people and a single-member LLC with an S-Corp election for single people. C-Corps are trouble and not needed in the mix.

35:00 – Question about entities for investment management businesses versus simply trading your own money. Green answers first and then Gillett finishes up. Green discusses using S-Corp elections for management company LLCs to reduce self-employment (SE) tax. If carried interest tax breaks are repealed per the 2010 and 2011 Obama budget requests, investment managers maybe even more interested in the S-Corp SE tax reduction strategy. Will that S-Corp SE tax loophole survive further tax law changes? Gillett comments on this too. S-Corp restrictions versus more flexible LLCs.

43:00 – Gillett comments on master-feeder offshore hedge fund structures.

Rest of TOC coming soon.

Mar. 4 , 2010 Podcast
(mp3 file, 9.0 MB 75:00 length)
Sorry, Robert's mic was "hot" (loud) and the recording is not good.

01:00 - Green discusses problems with dual-entity schemes covered on our blog series.

06:50 - Green discusses the latest on the financial-transaction tax.

11:00 - Green discusses the CFTC proposals to reduce forex trading leverage to 10:1.

13:30 - Green discusses financial-reform in Congress and Europe. Some EU officials are gearing up to attack speculators and rein in hedge funds. .

14:00 - Green discusses tax increase initiatives, including tax increases in the health care legislation. Green touches on potential repeal of carried-interest tax breaks, new taxes on investment income and more.

16:50 - Brent Gillett discusses financial-reform. Some hedge funds may be in favor of the Volcker Rule, since it may reduce their competition from the banks. State regulators are continuing to scrutiny hedge fund documents and asking more and more questions about the language in the offering documents.

Rest of table of contents to be added later. Q&A and more.

Feb. 11, 2010 Podcast.
(mp3 file, 9.1 MB 79:21 length)

Our entire conference call today was about the new controversial CFTC rules to force a draconian reduction of leverage in the retail forex trading marketplace. We picked up from where we left off on last week's podcast (see below).

Here's the text from the invitation.
I asked an executive of a leading retail forex broker (FXCM) about this matter and he emailed me several good comments, which we will discuss on today's call. Here's one. "US traders opening through their (redacted name) UK (platform) can continue to trade at up to 200:1 leverage, use hedging, and trade non-FIFO. As far as whether the FSA (UK regulators) will adopt these (same CFTC) measures, we have no reason to believe they will since they have more experience and a longer track record of regulating the forex industry. The CFTC takes a one size fits all rules based approach to regulating whereas the FSA evaluates each firm individually to determine what the broker can and cannot do." This FXCM executive played an important role on today's call. .

We both acknowledge that several forex traders are concerned that the UK FSA may follow suit on the CFTC's more draconian leverage rules. Keep in mind that the G-20 and IMF - strongly including the US and UK - are trying to coordinate financial-reform on a global basis, as with the bank levy being chosen over a financial-transaction tax. Leading financial-centers are very sensitive to losing business to traders, brokers and banks moving their business transactions to less-regulated and less-taxed countries. The CFTC indicated that it wants to rein in fraud and Ponzi schemes in the forex trading marketplace. Giving traders further impetus to move forex trading accounts to known tax and regulatory havens (not the UK in this case) could subject Americans to more danger not less. Will and can the CFTC block offshore forex trading accounts all together?

Forex brokers have been regulated in the US since CFMA 2000 and stiffer capital requirements were passed by the NFA in 2009. It begs the question, why this heavy-handed move by the CFTC at this time? Do the CFTC and CME prefer that the forex interbank (off-exchange) marketplace move on-exchange - onto the CME who offers plenty of currency contracts with decent leverage?

Our Traders Association has joined this forex campaign and we are sending our reply letter to the CFTC soon. We may also have a Petition campaign as well. Kindly join us and share your thoughts and good ideas too.

Table of Contents for today's call:

00:00 - Robert Green’s remarks.

16:30 - Brent Gillett, JD's remarks.

21:10 - Jason Andrus of FXCM remarks.

25:00 - Discussion between, Robert, Brent and Jason.

To publish the TOC tomorrow.

Feb. 4, 2010 Podcast.
(mp3 file, 13.1 MB 109:09 length)
Host: Robert A. Green, CPA

Most of the first half of the call is on the new controversial CFTC rules to force a draconian reduction of leverage in the retail forex trading marketplace.

00:00 – Robert Green’s remarks. Commentary on the CFTC's proposed rules to reduce retail forex leverage from 100:1 to 10:1 – among other regulatory changes – which would very seriously disrupt the U.S.-based forex trading industry. The GreenTraderTax Traders Association is joining this industry fight to formally reply to the CFTC with our goal of changing their draconian reduction to forex leverage rules. On this call, we explore with forex traders and Brent Gillett JD (co-host) reasons why we believe the CFTC doesn’t need to go overboard with such large reductions is available leverage. Please join us on this campaign.

17:00 – Brent Gillett, JD remarks on the CFTC forex rule proposals. Some regulation is good for the industry but he agrees the leverage reductions are going too far.

21:00 – Robert Green remarks again about the CFTC forex proposals to reduce leverage. 100:1 forex leverage sounds very high, but due to the mechanics of the marketplace and brokerage firm practices, forex trading leverage and risk is in-line with securities and futures trading.

23:50 - Callers weigh in on how the forex market works and how the 100:1 sounds very risky but in reality is not as high as it seems, compared to other marketplaces. The cash forex market moves in tiny increments and the risk in eminis and other markets are similar. Derivative contracts in futures and options have embedded leverage vs. forex as a cash marketplace, so it may be similar in leverage too. We explored some concepts and were not certain of all these remarks, so check back next week. In reality, forex brokers close out trades when losses happen, due to the 24-hour nature of the marketplace. It’s almost unheard of for a broker to ask a client to deposit more funds. The risk on forex is similar to other markets, so to rein in leverage 10 times now throws it off balance vs. other marketplaces.

- Question on trading entities and how best to create the earned income component needed for the AGI deductions (retirement and health insurance). Green gives the full answer: pay administration fees in partnerships (not guaranteed payments) and payroll in S-corps.

55:20 - Question on setting up an IB (Introducing Brokers). Brent Gillett answers.

62:10 – Question on GreenTraderTax guides, which one to purchase? Green replies. Start with Green’s 2010 Trader Tax Guide.

64:16 – Question about running a trading room on the Internet and showing customers your trades. Green speaks about the business and big-picture aspects and pitfalls. Gillett speaks about the legal issues including using the “publisher’s exemption” from the investment advisor rules. You need plenty of Web site disclaimers too. Don’t “pump and dump.”

73:00 – Brent Gillett’s closing remarks.

74:45 – Question. Is there any credible threat from this administration against the preferential 60/40 tax treatment on futures? Green discussed the proposal in the President’s 2010 and 2011 budgets to disallow 60/40 treatment on futures dealers. We covered this on our blog. Will this proposal be passed by Congress? If so, would it lead to a slippery slope for repeal on all futures traders? How does this relate to tax battles forming around the investor-class?

Robert Green completes this week’s conference call – and he went long – with commentary on the great tax battle building in 2010, with political implications for the midterm elections. The Bush Tax cuts are scheduled to expire in 2011. President Obama has promised to extend the Bush tax cuts for the middle class (to honor his pledge of no new taxes on the middle-class). The President wants to allow the Bush tax cuts to expire on the rich and on the investor class too – with the qualifying dividend tax rate currently at 15 percent returning to ordinary tax rates (up to 39.6 percent) in 2011. Will Congress use brinkmanship to not extend the Bush tax cuts on the middle class as it did with the estate tax which sunset in 2010? Congress was expected to extend the 2009 estate exemption, yet it instead allowed the estate tax to repeal as planned in 2010, returning to a pre-Bush tax cut estate tax in 2011 (at a very low exemption amount and high tax rate). Is it possible Republicans may balk at allowing only the middle class to continue with Bush tax cuts, and allow tax increases on the investor class and perhaps the rich too? This will get interesting!

88:00 - Robert Green gives an update on potential repeal of carried interest tax breaks. It’s not a done deal either.

91:45 – Question. Are the attacks on Wall Street with the bank tax and financial-transaction tax constitutional? Robert Green wrote a blog on this last week and he provides a full answer.

Robert Green finishes the call with commentary about the fiscal crisis in America, TARP, bailouts, populism, unintended consequences, and more. Tom, my favorite straight man got me wound up again to finish out the call with a little heightened debate.

Jan. 28, 2010 Podcast.
(mp3 file, 7.5 MB 65:47 length)
Host: Robert A. Green, CPA only.

00:00 – Robert Green’s remarks. Updates on the administration’s new bank fee, the Volcker Rule and potential financial-transaction tax in the U.S. and globally. Sweden's bad experience with the financial transaction tax in the early 1990s. The latest politics, celebrity causes, global tax for social causes, and more in connection with the financial-transaction tax.

16:00 - Question: Is education and training for trading tax-deductible, before and/or after starting your trading business? Green explains all the rules for education expenses, Section 195 start up costs and more.

22:00 - Question: Do trading partnerships file separate tax returns? Green explains how it all works.

23:15 - Question: Forex broker advised client that NFA is proposing to drop forex leverage from 100:1 to 10:1. Don't worry we fix the echo. Green discusses this proposed rule but did not have all the specific answers. We will cover this more next week.

26:40 - Question: LLC for professional trader and he has losses. Should he worry about those loss deductions? Green answers.

32:20 - Comment on forex leverage proposals from the NFA. It's just a proposal and comments are due soon. Green discussed this topic more.

38:25 - Question about dividend reinvestments. Green answers.

40:00 - Question about foreign bank account reporting and foreign forex accounts. Green comments more about trading forex in the UK and other potential solutions to avoiding the severe changes in leverage. Green talks about filing foreign bank account forms. Green speculates on how this leverage change and other changes may negatively impact forex brokers in general.

47:55 - Question on the new 2009 exemption on unemployment insurance benefits. Green answers.

51:10 - Question: Do you need to set up a separate entity bank account in addition to the separate entity trading account? Green replies. He also discusses how to continue paying non-pro data feed fee rates with a family entity.

59:40 - Questions about Mini 401(k) retirement accounts for traders. Green replies in full.

65:00 - Green's closing remarks.

Jan. 21, 2010 Podcast.
(mp3 file, 9.3 MB 81:23 length)
00:00 – Robert Green’s remarks. Breaking news on the administration’s new Volcker Rule to separate commercial banks from proprietary trading and alternative investments. Portfolio managers in banks can seize the opportunity to set up their own investment-management business. The latest developments on the financial-transaction tax and how it relates to the administration’s bank fee and Volcker rule plans.

15:00 – Brent Gillett’s opening remarks. New CFTC rules for forex involving FCMs (Future Commission Merchants) and Retail Foreign Exchange Dealers (a new term), Introducing Brokers (IBs) and more. Most forex brokers are FDMs (Forex Dealer Merchants) with $20 million of net capital. Smaller IBs need to be guaranteed under the new rules. Forex leverage rules are 100:1 now but may be dropped to 10:1. Some forex is moving offshore, such as spread betting (NFA restrictions) to the UK-based accounts. The CFTC has reduced position limits too. Voice opinions during the 60-day comment period.

24:45 – Question: Does Section 1256 apply to ETFs? Green answers with an ETF tax primer, including when UBIT can be triggered on ETF investments in retirement plans. Options on ETFs treatment discussed too.

28:40 – Question involving offshore hedge funds. U.S. citizen living in Asia wants to form a new investment-management business; what company structure is best? Green talks about foreign tax benefits and briefly answers the question. Brent Gillett answers the question in detail. Green discusses some concerns about international dealings. Gillett compares managed accounts to a fund. Questions and discussion about privacy of ownership. The Asian marketplace is growing fast for investment-management businesses. Gillett discusses good jurisdictions for offshore funds. Are there any new rules coming from the White House in connection with Cayman Island companies? President Obama has talked about it. Gillett says it's more problematic for people evading taxes with personal foreign holding companies; not offshore funds set up for tax-exempt investors and foreign investors. Delaware is the best jurisdiction for onshore funds (better than Nevada).

42:00 – Question: How should ETF futures and ETFs on Treasuries be treated? Green answers. Sorry — Green's microphone moved and the sound became worse.

45:10 – Question: How to qualify for trader tax status? How many total trades are needed on an annual basis? The GreenTraderTax Golden Rules. Green’s 2010 Trader Tax Guide — scheduled to be released Feb. 1 — has these rules and much more.

54:00 – Question: How do dual-entity schemes work? Green explains the pitfalls.

Rest of call TOC not published. Very sorry for the poor sound quality.

Jan. 7, 2010 Parts 1 and 2 Podcast

Note: In the following podcast we discussed the repeal of carried-interest tax breaks. While a repeal has been proposed in President Obama's 2010 and 2011 budgets and passed by the House, it hasn't been approved in the Senate yet. Please listen to our 2/4/10 podcast for very important updates.

Part I (4.0 MB 33:06 length)
00:00 - 2010 tax and financial reform issues. Financial-transaction tax seems to be on the fringe. CFTC margin requirement increases. Other changes expected on financial reform and health care taxes.

04:00 - 2009 tax preparation: It's a good idea to get started now. 2010 entities are smart to start now as well, to reduce filing complexity of having both an entity and Schedule C in 2010.

5:45 - 2010 tax planning including Roth IRA conversions. Estate tax changes.

6:30 - Question on deducting trading losses. Do trading losses offset other gains and income? Business traders with Section 475 MTM have ordinary-loss treatment. Forex losses by default are also ordinary. Capital losses are limited to capital gains. Special rules for futures capital-loss carrybacks only against futures capital gains. How should a Section 475 MTM election be handled if you have material capital-loss carryovers? You want capital gains to offset capital losses and MTM ordinary losses rather than capital losses. How can you have it both ways? Key strategies on climbing out of a capital-loss hole.

11:45 - Question on entities. Moving states so which entity is best? Husband and wife general partnerships are portable from state to state. How pass-through entities work tax-wise. The differences between partnerships, LLCs, and S corps for traders vs. money managers. How retirement plan and health-insurance premium deductions work with pass-through entities. C corps are only added as a second entity when you need a medical reimbursement plan.

16:13 - Question on how to qualify for trader tax status. Green's golden rules discussed in detail. The benefits of trader tax status and how to claim it still for 2009. How entities help avoid scrutiny on trader tax status and unlock adjusted gross income (AGI) deductions (such as retirement and health insurance premiums).

26:40 - Question on account size needed for trader tax status.

27:45 - Introduce Brent Gillett, JD.

28:35 - Brent Gillett comments on the week's news: Financial reform, new hedge-fund registration rules, and more. Compliance audits are on the rise. Forex clearing firms are requiring managers to be registered CTAs. Gillett is setting up many incubator funds now; he discusses how they work. (Sorry, audio file was cut off and we pick it up again in Part 2.)

Part II (7.0 MB 58:18 length)

00:50 - Question on offshore incubator funds to attract offshore investors. Gillett answers and discusses attractive places to form the entities, U.S. tax elections, and more. Master fund and U.S. and offshore feeder funds. You can set up the master fund only as the incubator to start to build the track record. Or you can start a U.S. feeder fund first.

06:00 - Question on data feed fee rates, professional vs. non-professional rates. Green answers.

09:10 - Two questions. Do you lose any tax deductions by forming a new entity, such as a home-office mortgage deduction? Green answers "no" and explains. How the home-office deduction works with Schedule C vs. pass-through entities (partnerships vs. S corps).

12:10 - Question: Is a Roth IRA conversion wise for a person age 71, with an IRS life-expectancy period of 20+ years? Green discusses RMD, estate taxes, and more.

16:00 - Question: Does an inactive husband and wife general partnership have to file a tax return? Green answers.

18:30 - Question: How do I trade other peoples' money, especially their work-based retirement-plan accounts? Green answers.

22:15 - Question: How does trader tax status work with option traders who have longer holding periods and don't day trade? Trader tax status is not for everyone.

24:45 - Question regarding joint trading accounts. Is it complicated to take money out of trading accounts as an entity? Green answers "no" and gives all the details.

26:15 - Question: What's the average turn around time for entities?

27:45 - Question: Are expense reimbursements or deductions possible when trading in IRA accounts? Green answers "yes" and explains how.

31:10 - Comment on the financial-transaction tax petitions.

32:30 - Gillett says goodbye and gives contact info.

33:05 - Question on best types of entities for traders. Green answers. How to handle the earned income component in partnerships vs. S corps.

36:10 - Question. Where does Green think we stand on the financial-transaction tax now? Green gives his latest take. Wall Street vs. Main Street and much more.

45:55 - Comment on financial-transaction tax. Green replies with back and forth comments.

48:50 - Question: Can carried-interest tax breaks be repealed in 2010? Green answers.

54:00 - Comments back and forth on the trading industry.

57:55 - Green's closing remarks.

Dec. 17, 2009.
(mp3 file, 8.5 MB 74:21 length)
Invitation for this call.

Note: In the following podcast we discussed the repeal of carried-interest tax breaks. While a repeal has been proposed in President Obama's 2010 and 2011 budgets and passed by the House, it hasn't been approved in the Senate yet. Please listen to our 2/4/10 podcast for very important updates.

Carried-interest repeal update. Financial-transaction tax fight. Are offshore funds safe from financial reform and tax efforts? Proprietary trading firm models and tax treatment. UBIT issues and unions going offshore with investments. Foreign accounts and Switzerland tax deals. White-collar crime, attorney-client privilege, and more.

00:00 Carried-interest repeal update.

10:00 Taxes are headed up for financial-industry players. Carried interest, financial-transaction taxes, bonus restrictions or taxes, bank levies, taxes on upper-income, VAT taxes, and a global tax. Carried interest is the low hanging fruit some leaders are trying to pass first. The House said yes; let's see what the Senate says. The President agreed with the House.

12:30 UK city tax news, Tories vs. Labor, and what it means for the U.S.

13:00 Financial-transaction tax in the U.S. and political update. Global tax efforts.

15:45 The House passes many bills to make a statement, but many may not pass as originally crafted. The window of opportunity is closing with the midterms around the corner. The Republican strategy.

19:00 Brent Gillett JD talks about the House and Senate bills for financial reform.

26:30 G20 discussions on offshore tax havens and preventing leaks in the dike of financial reform and global taxation. Should investors change their investment-management business plans and are the days numbered for offshore funds? Pensions invest offshore to avoid UBIT, which would apply in a domestic fund. Congress may repeal UBIT-blocker tax rules so U.S. pension funds can invest directly in the U.S. Isn't that better for U.S. industry, rather than outsourcing financial and professional services to tax-haven countries? Green points out that unions scream about loss of U.S. jobs, yet their union pension funds invest in offshore funds -- sending related jobs outside the U.S. Unions also back the financial-transaction tax and that makes no sense, since the tax will raise the investment costs of their union members (in those large pension funds).

32:30 How can traders react quickly to disruptive changes such as offshore havens, a financial-transaction tax, and more. Stay lean and mean and be ready to react. Prop trading firms may end up being exempt from financial-transaction taxes as professional market makers. It's not expensive or hard to form a proprietary trading firm for your group of traders as non-customer broker-dealer members of the Chicago exchange (CSX).

35:50 Question on prop trading firm models. Green explains business, legal, and tax matters. K-1 pass-through tax treatment. Get reimbursed for expenses before year-end or take UPE expenses on your tax return for your expenses. How to deduct losses. K-1 vs. the 1099-Misc. model. How to handle retirement plans and local taxes such as NYC UBT. How the special tax allocations work. Solo 401k plans must be opened before year-end -- act quickly! How to manage prop-trading firm risks.

45:30 Day trading IRA with futures raises question about UBIT. A full overview on how UBIT is triggered. No UBIT on futures or forex. UBIT applies on margin interest in securities and also through pass-through K-1s such as hedge funds and ETFs.

50:00 Efforts to fight the financial-transaction tax.

51:40 Question about Switzerland forex brokers and doing business in Switzerland and foreign countries in general. NFA's tougher new rules for forex brokers and hedging transactions are pushing some forex business to the UK and other foreign countries. How to do business abroad, special tax rules, and how to stay clear of tax trouble. Holding foreign currency is ordinary gain or loss, not capital gains and losses. Forex traders can opt out of Section 988 ordinary rules and use capital gains and losses; even lower 60/40 Section 1256g treatment. Green's latest videos for MoneyShow cover these topics too.

61:30 The IRS, SEC, and government in general are turning up the heat on white-collar criminals and tax infractions, with much longer jail times and penalties. IRS-preparer penalties are affecting how accountants work. There are important differences between how attorneys and accountants work with their clients. Brent Gillett talks about insider trading and compliance.

72:30 New petition coming for our financial-transaction tax fight. Please sign it and spread the word. We really need your help!

Dec. 3, 2009.
(mp3 file, 9.6 MB, 83:59 length)
Invitation for this call.

To add the Table of Contents soon.

Nov. 11, 2009.
(mp3 file, 8 MB, 72:32 length)
Recommend a headset since the sound volume is lower on this recording.

Table of Contents

00:00 - Introduction from Robert A. Green.

01:00 - Brent Gillett comments on news of the week for investment management. He briefly discusses the Bear Stearns hedge-fund managers’ legal victory vs. the government. Brief update on hedge-fund registration bill and state’s initiatives to repeal their di minimis rules (allowing a few investors before registration). Other states are applying a higher fiduciary standard for each investor in the fund, which is customary for managed accounts.

06:00 - Question: Trader and ex-broker showed his personal trades to potential future money-management investors. He asked about taking a tax deduction for meals and entertainment with these potential future clients. Green commented on tax matters and Gillett commented on the dos and don'ts of showing your trading performance to outsiders, perhaps triggering registration as an investment adviser for securities in California (which doesn’t have a de minimis rule). Green discussed how trader tax status (business treatment) differs from money management (business treatment). Both require different starting points for the business treatment; active trades for trader tax status and paying clients for money-management business tax status. Both categories can capitalize on pre-business Section 195 start-up costs. Travel and entertainment tax deductions are possible for business traders but there are some concerns about how the IRS will view these deductions. Traders don't have customers to entertain like money managers do, but they can meet with other traders to compare trading strategies and help each other. We address many tax and regulatory nuances surrounding this question.

17:30 - Question: What’s the best way to form an entity for a new incubator fund? Most incubator funds, like regular hedge funds, are formed in Delaware, a friendly tax and business jurisdiction. It’s usually best to form your management company in your home state, because you might need to register as an investment adviser there as well. Brief discussion of the incubator fund strategy: The incubator fund is formed in Phase I and all the legal documents for investors are prepared in Phase II (before you can accept funds from paying outside investors). Green and Gillett discuss state tax nexus and other issues. Gillett explains how to set up an incubator fund and some of the advantages.

21:00 - Delaware Headquarters Management Corporation (DE HMC). By paying a small minimum tax (around $5,000) to Delaware – which is more than the typical Delaware entity maintenance cost of around $300 per year – by using a DE HMC, you can better solidify your company’s tax nexus (business presence) in Delaware. A DE HMC allows you to better protect your company against other states’ attempts to claim more nexus in their state (fighting off tax bills from other states) better than with a typical Delaware entity formation. Some states argue “economic nexus” includes having customers in their state. Sales tax nexus rules are stricter and easier to defend against because they‘re based on physical presence — apportionment factors including property, sales, and employees. States are now desperate to hunt for tax revenues, so watch out for escalating nexus claims and attacks. It’s best to consult a multi-state tax expert. Hedge funds are virtual and mostly run by their management companies; they generally do well with nexus issues. But that could be changing and we discuss how. Financial newsletter (publisher exemption) sites are also usually virtual businesses and they should consider the DE HMC. Consult Green on these types of businesses too. Many larger corporations house their intellectual property in a DE HMC so they can carve out significant income taxable in Delaware and reduce taxable income in states where they do business and have nexus. The HMC is respected as a separate business, whereas a regular Delaware company may not be under “attribution” nexus rules.

25:45 - Follow-up question about business traders deducting meals with other traders. We drilled down on some of the specifics. See the IRS publication 463 "Travel, Entertainment, Gift and Car Expenses." Although business traders don't have customers (investors) to have meals with, they do compare research and strategies with other traders, which is ordinary and necessary for their business. Many business traders are home alone during the day and meeting other traders for meals, entertainment, seminars and events has business value. Use common sense, considering the IRS is bent on denying these deductions to traders, upper-income taxpayers, other small businesses, and more these days. Green cites several examples of taxpayer abuse on these types of deductions and explains what not to do. How to document and justify your expenses is explained. Recently example: The IRS attacked a high-income stock broker for unreimbursed meals and entertainment expenses, where in prior years it would have allowed those deductions. Don't be intimidated by the IRS — deduct what you are reasonably entitled too. It’s a good idea to leave an overpayment credit with the IRS to reduce potential interest and penalties after an exam.

33:30 - Financial-transaction tax update from Green. Also read Green’s blog dated 11/09/09 “Financial-transaction tax is dead on arrival globally, which is good news locally.” On the call, Green gives his latest opinion and predictions. The fight is not fully won yet, and proponents of this tax haven’t given up yet.

42:50 - Question from a part-time trader facing retirement from his job and graduating into full-time trading. Entities seem confusing and complex to him; does he need one? Green explains how entities for traders can be fairly simple, easy to form, and low in cost. Some retiree traders don’t achieve trader tax status and rather than press the envelope trading too much, they should consider trading within a retirement-plan account. In that scenario, they can still deduct all trading losses and expenses with a deferred tax benefit (realized with lower taxable distributions later in retirement). Green addressed retirement plan trading strategies in detail on his blog here. Green explains how a simple husband-and-wife general partnership is similar to trading in a joint individual account; however it’s better for taxes. Hedge-fund entities are more complex, but still fairly simple. Read our Entities page for special strategies for setting up new entities in Q4 2009. It’s about using up capital loss carryovers, generating new Section 475 MTM ordinary losses, and more.

51:30 - Veterans Day tax topics for traders: Several in the armed forces have bought Iraqi dinars; Green discusses tax treatment on holding physical currencies, including the dinar. Section 988 foreign currency transactions are subject to ordinary gain or loss by default. A trader can't opt out of Section 988 and into lower 60/40 futures tax treatment or regular short-term and long-term capital gains and losses treatment unless they trade forex (spot, forwards, and over-the-counter options). The opt out (capital gains) election is for forward-looking contracts – spot settles in 48 hours and forwards in more than 48 hours. Investing in the actual physical currency is not a forward-looking contract of any kind. Learn more about forex here. It can get very confusing when you buy foreign equities denominated in foreign currencies, and hold the currency while not invested in a foreign security. The embedded currency appreciation or depreciation while in the foreign trade is part of capital gain or loss transaction. Whereas, holding the currency while not invested in foreign equities is subject to Section 988 with no “opt-out” choice. When you convert the foreign currency back to dollars, make sure you don’t count income or loss twice. Consider that some of the appreciation or depreciation on the physically held currency may already be accounted for in capital gains and losses on foreign equities. Look at the big picture: how many dollars you converted to start and how many you got back at the end of the day. The ordinary gains and losses plus the capital gains and losses need to equal that overall net number. This type of situation can be confusing and you may need our help on this accounting.

55:15 – Question about Green Active Investor and green energy tax breaks. Learn more here. Green gives an update on this topic and explains the general active investor tax and business benefits. There are many opportunities here.

65:00 - Charitable deductions: Dos and don'ts.

70:15 - Closing remarks

Oct. 29, 2009.
(mp3 file, 10.4 MB, 86:41 length).

Table of Contents

00:00 - Introduction from Green.

00:55 – Question from a trader making 150k and with a small amount of trading expenses. He qualifies for trader tax status, but is claiming trader tax status worth it? Setting a precedent on trader tax status in a profitable year may come in handy, perhaps in a year when you have MTM ordinary trading losses and need to depend on trader tax status. What are the tax alternatives to trader tax status? How can you best utilize investment expenses? Form 2106 unemployed business expenses are an important deduction too (for employees) – they are another miscellaneous itemized deduction. Recent IRS attacks on Form 2106 expense deductions especially for upper-income taxpayers. Trading commissions are not expenses but rather part of trading gains and losses (netted out).

10:40 – Question: What’s the best way to handle trade accounting? TradeLog is our preferred trade accounting program, which we sell on our site at http://www.greencompany.com/Traders/Software.shtml. Green comments on other programs too. It’s difficult to figure out wash sales correctly without using TradeLog. Use TradeLog for year-end tax planning to avoid wash-sale problems. Wash sales are complex and they can be better than capital loss carryovers.

17:15 – Year-end tax planning is important now. Tax deadlines can affect the markets too.

18:30 – Question: Sole proprietor trader elected Section 475 MTM on securities only in the prior tax year. In 2009, he has trading losses in securities and futures too. Can he take these futures losses as ordinary losses too? The answer is no. Futures losses can be carried back three tax years, but only against futures gains in those years. Entities can’t fix the past — only the future. Is it possible to dig out of a capital-loss hole with Section 475 MTM elections in a new taxpayer entity? There are lots of nuances here in our strategies. “Do over” entities and more. Don’t get stuck with losses you can’t deduct.

24:40 - Husband and wife defacto or verbal general partnerships with an internal MTM election within 75 days of inception. It’s a great fix for current year losses, but it must be the reality on all fronts (no making stuff up), and you will need our help and advice.

26:08 – Brent Gillett JD joins the call with comments on investment-management businesses. Family assets, incubator funds, new regulations coming and more.

28:00 - Question: Wisconsin-based trader wants to manage futures for around seven friends and family, through a brokerage firm offering a “friends and family” managed account structure. Trader can be an exempt-CTA (through NFA) and Gillett explains many of the dos and don’ts. How to set up a money-management business in the correct manner and what’s involved.

34:30 – Question: Ex-broker living in California wants to be an investment adviser. Gillett explains what needs to be done in accordance with California law for registered investment advisers in securities (futures are regulated by the NFA instead of the states). Even one paying client for securities advice requires state registration in California. There is a “publisher’s exemption” for newsletters to the general public, but not to specific people for customized advice. Gillett explains what’s involved with forming an RIA (Registered Investment Adviser) in California, the approximate cost and how he can help on all fronts. Range of fees that investment advisers charge for managed accounts vs. hedge funds. California only allows the payment of performance fees from clients with a net worth of 1.5 million or more. Does it pay to move states? National de minimis rule exemption and other issues.

40:30 – Gillett explains the financial reform news of the week. The House Financial Services Committee recommended that the hedge-fund registration bill go through. It’s still fairly early in the legislative process. Registration rules don’t seem to be a deal breaker for hedge-fund entrepreneurs. The basic industry dynamics and advantages for investors and managers appear to be in place.

45:00 – Question: How do you offset trading losses against W-2 or S-corp income? You need Section 475 MTM for ordinary loss treatment, which we recommended on securities but not futures (unless you still need to work your way out of a large capital loss carryover). Forex (section 988) losses are ordinary by default. Net operating losses (NOLs) can be carried back two years and/or carried over 20 years. Stimulus II (as being discussed, although which may not be enacted) may allow a 5-year NOL carryback, just as Stimulus I allowed for 2008 NOLs only. Losing trader tax status means you can’t use Section 475 MTM. Mid-year changes in trader tax status and how to handle them. MTM is suspended and there are significant nuances when bouncing in and out of trader tax status. This part of the call is complicated and should not be missed!

52:30 – How we work with you, considering the prior question.

53:45 – Question on proprietary trading firms. Joining a futures prop-trading firm and receiving a 1099-Misc (non-employee compensation) means you don’t get a share of lower 60/40 tax rates because you have ordinary income plus self-employment (SE) taxes (meant to include this with the answer). An overview of prop-trading firm structures and deals. Nuances, convoluted points, and other pitfalls. Traders are usually responsible for their trading losses and some agreements are too vague on this point. What to do before you jump into one of these deals (which could sign away competition rights too). Issues on first loss capital, liquidity (locked up capital), commissions and more. Gillett comments on many legal issues to consider.

64:25 - Non-resident alien traders in a U.S.-based prop-trading firm may not have U.S. source income (effectively connected income, or ECI) in the LLC. Therefore, no U.S. taxes are paid or withheld by the LLC firm for non-resident alien traders. Profits from pure trading operations, without any other type of revenue (education, service fees, commissions, software or otherwise), are classified as “trading gains,” and the operation isn’t considered a “trade or business” (ECI). This same concept applies to local tax issues, such as New York City’s unincorporated business tax (UBT) and Illinois’ replacement tax. Having other revenues taints the trading gains to cause taxation.

66:10 – Follow-up question From earlier: A California trader wants to trade for family members. Trades securities, commodities, ETFs and currencies. It’s not wise to use a client’s login to trade; you should have a limited power of attorney to trade properly through the brokerage firm. Listen to your spouse to avoid family problems on losing money. Don’t trade for other people without consulting an attorney (such as Brent Gillett).

69:00 – Question: A formerly licensed (series 7) broker seek ways to hang his license before the 24-month window closes. What works and what may not work. Taking the series 7 exam again is a pain. “Parking” a license is not encouraged by FINRA and you need to be a properly operating broker. Topic applies to RIA with series 65 and 66 too. Does a prop-trading firm opportunity solve this problem?

74:50 – Question regarding cobra health-insurance expenses. Can you expense 2010 premiums in 2009? No, not with accrual or even cash basis accounting rules. How business traders can deduct health-insurance premiums, and the tax rules that apply. Cobra is usually more expensive than an individual plan.

78:00 – Question: Part-time trader with a full-time job has trading gains in retirement accounts and trading losses in taxable accounts. What can be done with the taxable account losses? How an entity for the balance of the year may help.

81:30 – Question: A consistently profitable trader is considering Section 475 MTM ordinary gain or loss treatment. Why does he need MTM if he consistently has gains? Green recommends MTM in case this trader has trading losses in a subsequent year. Trading losses can arise quickly and free MTM “tax-loss insurance” is a good idea for securities traders – but not futures traders who want to retain lower tax rates of 60/40 treatment.

84:30 - Ending remarks. We are gearing up for Roth conversions and year-end tax planning. There is still time to set up an entity before year-end for 2009 tax savings.

Oct. 22, 2009.
(mp3 file, 9.1 MB, 79:09 length).
Recommend a headset since the sound volume is lower on this recording.

Table of contents

00:00 - Introduction from Green. Year-end tax planning.

6:00 Brent Gillett JD discusses Galleon hedge fund insider-trading case. Dark pools may be more regulated, as was recently done for flash trading. Transparency vs. anonymity.

17:00 Roth conversion questions.

19:58 - Money manager outside U.S. Tax treatment and related issues. Foreign accounts need to be reported too.

25:00 - Good idea to use an attorney like Gillett for investing in managed accounts and hedge funds. Inappropriate money-management schemes, due diligence, proper structures and more. Gillett has new services in this area — a separate firm called Alternative Diligence.

32:10 - Proprietary trading firm agreements and tax matters. Being at risk for your share of leverage and related trading losses. Cross collateral and related risks. Due diligence, risk-management systems and more.

36:00 - Foreign partners in a U.S. prop-trading firm usually don’t have U.S. source income (ECI) and therefore don’t owe U.S. income taxes, unless the prop-trading firm has other sources of income besides trading, such as commissions or educational services. There is an exemption for capital gains.

37:15 - UBIT issues in retirement plans. Leverage with securities leads to UBIT. Futures and forex trading aren’t subject to UBIT, unlike leveraged ETFs.

38:15 - Question: 2009 trader asks about the best entities for traders. Discussion of LLCs, S-corps, and general partnerships. It's appropriate to add a C-corp as a second entity when you are seeking a medical reimbursement plan and other fringe benefit plans. What’s best for a single trader in California vs. a husband-and-wife team.

47:30 - Financial-transaction tax update. (Also, see the latest blog update on Oct. 21 for Green's latest opinion on this tax, bonuses and more.)

65:30 - Question about retirement-plan loans; early withdrawal taxes and penalties vs. loans.

68:45 - Question about estimated taxes and year-end strategies.

71:40 - Viral marketing opportunities for money managers and how to stay clear of selling a private security in public forums (which is big trouble). We covered this on our Oct. 8 call in detail.

76:10 - Moving retirement accounts to a Mini 401k. Do you lose any ERISA protections?

Ending remarks.

Oct. 8, 2009.
(mp3 file, 9.8 MB, 85:21 length).

Note: In the following podcast we discussed the repeal of carried-interest tax breaks. While a repeal has been proposed in President Obama's 2010 and 2011 budgets and passed by the House, it hasn't been approved in the Senate yet. Please listen to our 2/4/10 podcast for very important updates.

Includes the below items: A formal table of contents with time breaks will be added soon.

Q&A on several last-minute 2008 tax preparation questions including: husband-and-wife partnerships, Section 475 MTM accounting, forex reporting, proprietary trading firms (1099-Misc. compensation vs. K-1 member trading gains treatment), Roth IRA conversions and more.

Financial-reform update, including discussion of a new House bill from Congressman Kanjorski (D-Penn.).

SEC and certain states are beefing up attacks on investment managers. Discussion of the SEC sending one manager a notice against promoting himself and his private hedge fund in the public space, which is expressly disallowed. The dos and don'ts here and how it’s becoming difficult with social media and the many public outlets.

Mutual funds with hedge fund attributes (higher fulcrum fees, hedging with ETFs and more) are now less expensive to form and comply with and they are a good alternative to private hedge funds. It solves the above issue of marketing in the public space.

Hedge fund vs. managed accounts tax treatment and pre and post carried interest tax repeal breaks in 2011.

Update on the financial-transaction tax around the globe; a growing majority seem to be leaning in favor of traders, who do not support this dreaded new tax.

Tax law change predictions, even if Republicans win more seats in 2010. Effects on tax planning.

Sept. 24, 2009.
(mp3 file, 9.6 MB, 84:18 length).

Description: Full discussion of our Roth IRA conversion strategies (read about them on our blog). Plus several other good tax questions and answers; see the table of contents below. Update from Brent Gillett JD on financial reform in the U.S. and EU and how they are attempting to coordinate. Update from Robert Green on the financial-transaction tax.

00:00 Opening remarks from Green.

01:30 to 12:55 — Question about the Roth IRA conversion strategy: How it is accomplished, requirements and effect on 2009 and 2008 taxes. If you converted in 2008, and the assets dropped in value in 2009, consider a recharacterization (redo) by Oct. 15, 2009. You can convert again in 2009 or 2010 (in 2010 the income threshold is waived). This is a great way to avoid the higher tax rates coming in 2011. Full coverage of this question and answer, plus a history of tax rates and how they are headed higher. Accelerate long-term capital gains and qualifying dividends in C-corps before that tax rate increases in 2011. We cover this topic in our blog article "Year-end tax planning, part 1."

13:10 — Question: Is it a good idea to convert to a Roth IRA at age 70 and a half as well? The answer is yes. Discussion of RMD (required minimum) distribution rules which only apply to regular IRAs (not Roth IRAs).

15:10 — Question about husband-and-wife partnership. If you have an annual loss, can you assess a fee for earned income in order to deduct health insurance premiums from AGI? Another choice is to deduct health insurance on Schedule A as a medical expense limited to 7.5 percent of AGI. Run it both ways to see which strategy is best, comparing net income tax to SE tax on the fee. You need good tax software for tax planning and preparation.

17:40 — Question about converting to a Roth IRA to avoid higher taxes in the future. How does unrelated business income tax (UBIT) come into play with a Roth IRA or with active trading in regular retirement accounts? UBIT is not an issue with Roth IRAs because they are tax-free. UBIT is generally triggered from using leverage, specifically margin or debt on securities in a regular retirement plan. UBIT also doesn’t apply to futures and forex. Can active trading trigger UBIT? Generally, no. We also discuss "self-dealing" and "prohibited transaction" rules. Fees on retirement plans, including Roth IRAs, are prohibited transactions. You can take a loan from a qualified plan only (an IRA doesn’t qualify). These issues are covered in Green’s blog article on Mini 401k plans.

23:55 — Introduction of co-host Brent Gillett JD who just joined the call.

25:00 — Gillett speaks about the EU's new Alternative Investment Fund Managers (AIFM ) directive for financial reform affecting investment managers. Third country managers that don't comply won’t be able to sell their funds in participating EU countries. U.S. and UK investment-manager associations have raised concerns. This EU directive deals with marketing, valuation, custody, disclosures, minimum capital and many other issues. An exemption for smaller managers is expected. Investment managers may need $500,000 to $1 million of net capital. It applies to fund vehicles (investment pools); it doesn’t apply to management accounts. Discussion on EU and U.S. efforts and how the U.S. and EU will probably act on their own to start so as not to delay matters waiting for global consensus, which includes Asian countries.

32:50 - Update from Green on the financial-transaction tax firestorm, including a new spin on it — a "currency tax" on global foreign exchange transactions. French ministers and other EU ministers advocate a currency tax (as well as a financial-transaction tax) to be used to help the poor. See "A Tiny Tax Could Do a World of Good" in The New York Times on Sept. 23, 2009. It's hard to argue against helping the poor, however, other sources of revenue can be raised for that cause. An ill-conceived financial-transaction tax will have many unintended and unwanted consequences. The fairness argument is being played, and bankers have been named the cause of the world financial collapse. Government officials want to tax bankers and traders because they make big profits. Traders need to be exempt from this global initiative to save the poor, as they need to focus on feeding their own families first. Green makes many new points on the subject and even questions the fairness of progressive tax concepts and targeting hard-earned income. Should social costs be paid by those that help cause social problems? Will a global currency tax usurp a U.S. initiative for a financial-transaction tax to help close the U.S. budget deficit? The good thing is this global talk may slow down a U.S. financial-transaction tax. Let's not rush to global financial reform and a global-transaction tax without full debate. It reminds Green of the health-care debate.

39:45 - Gillett comments on some states such as Washington that are taking a very aggressive stance on registered investment advisors. Washington is now treating investors in a hedge fund as direct clients of the manager, which means the manager owes an independent fiduciary duty to each investor. (The SEC doesn’t take this strict of a stance.) The manager must now make sure the hedge fund is suitable for the investor. Brokers do that as well, but many smaller funds don't use brokers for marketing their funds’ interests.

43:00 — Green and Gillett talk about after-the-fact attacks from the IRS and regulators. IRS and state tax exams are on the rise, but how far back can regulators look? If you get into trouble with regulators, what are the potential civil and criminal risks, and can you get insurance to cover it? Unless the trouble includes outright fraud, such as theft (e.g., stealing money in a Ponzi scheme), the penalty will likely be a civil fine, which isn’t too high ($250 to a few thousand). However, these fines could reach $5,000-$100,00 per client for operating an unregistered fund. States are hungry for more revenue and fines.

46:50 — Question about setting up an entity for a trader: Is it better to set up one or two entities? For married traders, a simple husband-and-wife general partnership is usually all that is needed. There are no state filing fees, annual fees, or state taxes, and it’s portable from state to state. Single traders can have a general partnership too. They need a second entity, such as a C-corp or S-corp, to own 1 percent of the general partnership. This is a good idea in states such as California and New York City. One client said the second entity is a less expensive option than getting married in order to have a general partnership alone. In most states, only an S-corp is needed without any other partnership. Special rules in Illinois, Texas, California and New York apply. Money managers must have liability protection with an LLC or corp; consult Gillett on that. Do you need a separate bank account for the entity? Medical-reimbursement plans in C-corps can be added to the mix.

52:35 — Alter ego issues with smaller investment managers. Is the “corp” veil respected? Gillett says Don't use the corp account as your own bank account. Respect the corp formalities. Protect yourself with good legal advice.

54:15 — Tough states on investment managers. Utah is better now. Washington is tougher. Michigan just liberalized its rules to allow performance fees with the uniform model code. There is still some confusion.

57:00 — Commentary by Nick (a frequent caller and a co-founder of the Traders Association) and Green on the currency tax (Tobin tax). What role will China play in this currency tax? Discussion on the financial-transaction tax and financial reform in general. Will the U.S. ultimately defend its financial-center interests? Or will the U.S. let go of some of those interests in order to reach a global consensus, potentially losing financial services business to businesses abroad? We discuss the chances of the financial-transaction tax coming to fruition. The global currency tax may usurp the U.S. financial-transaction tax and finding a global consensus may slow down enactment. Broader discussion on tax policy, U.S. vs. the world, helping the world's poor and progressive taxation.

71:30 — Question about trader tax status and entities. A caller formed a trading entity and now must go back to his last software job. Should he close the entity, or can he keep up his trader tax status levels while working a full-time job? How should this be presented on a tax return? How traders find financial freedom trading on their own.

74:15 — A trader wants to form a new LLC quickly before year-end 2009. How to handle capital losses from earlier in the year in his individual accounts. The LLC passes through capital gains and losses or MTM ordinary gains and losses to an individual tax return. How to use the entity to either generate capital gains (to use up capital losses) or claim MTM ordinary losses to offset wages and other income. It's a tricky game to dig out of a capital-loss hole. Learn more about this strategy including "do-overs" on our entity formation page.

77:00 - Brent Gillett says goodbye and gives contact info. Find Brent on our “Contact Us” page. Special investment-management business conference calls and Webinars are coming soon.

78:50 — Question about 2008 tax preparation for a trading LLC partnership. The K-1 shows "limited partner" but this person’s spouse is not passive. Passive activity loss rules do not apply in trading partnerships. Passive owners receive all business tax breaks (trader tax status business expenses and Section 475 MTM); however they are stuck with investment-expense limitations. Active owners receive the more favorable business interest expense treatment. How we work with clients on entities and tax preparation.

82:30 — Green closing remarks.

Sept. 17, 2009.
(mp3 file, 8.3 MB, 72:31 length).

Description: This call is a continuation (in style and content) from our last call on Sept. 3 (podcast and TOC below), including Green's take on the latest developments on the proposed financial-transaction tax, other tax increases and financial reform.

Green continues his fight against tax increases and onerous new regulations on traders and investment-management businesses. The fault lines are moving to a global stage with attempted coordination by the G20, U.S., EU and even the UN speaking out on these contentious issues.

Will financial reform and the financial-transaction tax wind up like the Kyoto treaty for global warming, with some countries opting out because others wouldn't sign on? Unless all the leading financial centers adopt the same financial-transaction tax policy and financial reform, traders and managers may move to the countries offering the best tax and regulatory policy.

Will U.S. Democrats and Republicans find common ground in defending U.S. financial market interests? Worldwide coordination efforts take time and sometimes it's difficult to reach a consensus. It’s even further complicated when countries swing from left to right and back again.

Green believes you should sell the rhetoric and buy the reality. So far, the transaction-tax talks have been full of emotional rhetoric to deflect blame and for political pandering. Don't be scared off from carrying on your trading and/or investment-management business.

Open remarks: Tax deadlines, penalties and consequences of filing late (get 3115s filed on time and NOL election for five-year carryback too).

We discuss year-end tax planning and special strategies this year considering tax rates are headed higher.

Roth IRA conversions.

08:40 - Question about status of financial-transaction tax. Global politics and coordination are now involved. There appears to be a connection with the financial-transaction tax and financial reform efforts too.

20:00 - Question posed: How can you qualify for trader tax status if you must trade less to avoid a financial-transaction tax? Green agrees and comments on tax notice escalation too.

23:15 - Caller lost job and went into full-time trading, and asks about estimated taxes.

Sept. 3, 2009 - Financial-Transaction Tax Threat
(mp3 file, 89:05 length).

Description: An edgy call with some venting from Robert Green against the financial-transaction tax, other tax increases and his opinions on the current debates in Washington and worldwide (on health care, tax policy, financial reforms, socialism vs. capitalism and more). Read Green's blog article today on the financial-transaction tax threat too.

00:00 - Opening remarks from Green and discussion with callers on financial-transaction tax.

39:00 Financial reform update from Brent Gillett, JD and Green. Super-regulator, joint SEC and CFTC talks and how they relate to overlooking the Madoff Ponzi scheme. Regulators and IRS are turning up the heat.

47:00 - Traders are changing states and even countries to reduce their tax burdens. Nexus and other related tax and regulatory issues and strategies. For traders, incubator funds and hedge funds.

54:50 - Incubator funds.

58:30 - New trader issues and strategies, including tax treatment elections, entities, retirement plans, start-up costs and more. Trader tax status vs. investor tax status and different ways to move forward, maximizing tax benefits with less IRS risk. Get organized on the tax and business front ahead of time.

66:30 - How Gillett can help investment advisors network and accomplish their goals. Aside from his legal services, he offers advice for prime brokers, raising money, compliance and more.

70:50 – A well-informed attendee comments on financial-transaction tax from his perspective as a long-term member of a stock exchange. Lots of back and forth with Green. The caller agrees it's a war against capitalism. Great comments on the inner-workings of financial exchanges; how they have morphed from human specialists to computerized electronic trading, and how it may be going too far with fast trading. Is the financial-transaction tax a justified way to reverse fast-trading abuses? Day trading is hard in the current markets, with all the changes that have occurred over the years with decimals, fast trading and more. Dark pools provide VIP (fast trader) access and potential front running. That should be fixed on its own without a a financial-transaction tax, which would allow a paid-way to front run and cherry pick. The government would be complicit in that inappropriate behavior if this tax is assessed.

80:00 - Closing remarks which lead to more good back and forth discussion. Traders are like money farmers —think of them as small family farms vs. the big-farm cooperatives (Wall Street firms). Online trading has leveled the playing field and small business traders play a special role in society (with capital formation and more) — a role that big trading firms don’t necessarily fill. Keep online traders in business and don't allow a financial-transaction tax put them out of business.

Aug. 27, 2009 - Questions and Answers:
(mp3 file,10.5 MB download).

Opening remarks.

03:15 - S-corp with C-corp entity combo and questions about SE tax. Single traders can use a C-corp to form a general partnership and also for fringe benefit plans such as a medical reimbursement plan. Earned income is reported in the C-corp rather than on your Schedule C.

09:50 - Green Energy Active Investor projects and structures. Great opportunities!

14:45 - Brent Gillett JD discusses hot topics and news. Investor Protection Act and heightened fiduciary duty to clients in fund. House passed the corporate governance Compensation Fairness Act which may enable Congress to limit hedge-fund manager compensation. Two potential problems here. Status of financial reform?

18:00 – We are working on a retirement trust concept. Retired traders can skip trader tax status and deduct trading losses and expenses directly in their retirement accounts. So, they pay taxes only on the net amount, not the gross over time. Details on how the direct payment or reimbursement of expenses from the retirement trust account work.

29:00 - Special Roth IRA conversion breaks in 2010. Roth Mini 401k features are available too. Tax planning with Roth IRA conversions, and when to choose the traditional vs. the Roth feature.

35:33 - Gillet answers a question from a registered investment advisor who took a job for another registered investment advisor. Dual registration in some states and other options are covered.

38:20 - Registration rules and the 15-client rule of the SEC and NFA. Some states require registration for just one client.

40:00 - Green Energy deal questions in Wisconsin. Should Green approach power companies for ideas? Yes, great idea and the reasons why.

42:00 – Active investor tax breaks for other industries too: software and open source.

46:00 - Roth vs. traditional solo 401k features. Can a trader have both in one product and choose each year which feature is best? In a year with low income and little to no benefit from a traditional plan contribution deduction, why not choose the Roth contribution instead?

50:00 - Michigan issues for hedge fund managers. Michigan did not allow performance fees in the past and there may be new rules now.

53:50 - Traders Association update, Facebook efforts and more. Facebook strategies, privacy, security and dos and don'ts. General dos and don'ts for statements made on the Internet.

1:04:00 - Compliance issues. Compliance services from Gillett’s his new Investment Compliance Group. Don't mention a fund on Facebook if it’s a private fund.

1:10:00 - Michigan follow up question; see above.

1:12:00 - Forex trader opts out of Section 988 into Section 1256g lower 60/40 tax rates during the year. Forex tax rules. FXCM UK accounts are considered foreign accounts as we understand it and therefore require a foreign bank account report. We don't think there are any UK taxes, but we aren’t sure yet. We can handle all the forex rules in tax preparation.

1:16:00 - Trader tax status attacks from the IRS — exams, appeals and tax court. How it relates to Section 475 MTM. Can you get an IRS clearance on trader tax status before filing? Probably not, but an intriguing idea. Holsinger, Chen and Vines tax court cases. When you don't need trader tax status and other options.

1:20:50 - UK tax increases are causing havoc on the other side of the pond.

Aug. 20, 2009 - Questions & Answers
(mp3 file, 9.7 MB download).

00:00 - Opening remarks from Robert A. Green, CPA.
GreenTraderTax Traders Association Group page on Robert Green's Facebook page at facebook.com/Robert.Green.TraderTax. Please join as a friend and also as a fan of the group. Consequences for filing 2008 tax returns late. Year-end tax planning topics to consider today. Hedge funds and regulatory changes coming.

04:10 Green Energy Active Investors tax breaks.

The rest is all Q&A:

06:33 - Forex trader asks about Section 988 and 1256g for lower 60/40 treatment.

12:35 - CPA asks a question about a forex day trader with another business too. Tax return preparation questions and answers. SE tax implications and more.

17:05 - Two questions on retirement trust accounts; the pros and cons and how to integrate them into trader tax status and more. Examples of the strategies Green wrote and spoke about here (see July 15, 2009 article and new video).

34:20 - Traders vs. dealers. There are many nuances in the tax code. CPAs new to trader tax will have many questions and we can help them.

36:00 - Transfer of income strategy to unlock home office deductions. You need footnotes to explain trader tax treatment and footnote. See our guides.

38:50 - Trading entities and how to create earned income for retirement-plan deductions. Use entities to claim trader tax status and focus all trader tax matters on one tax return. We recommend simple pass-through entities (general partnership, multi-member LLCs or S-corps). Add a C-corp to the mix only if you are single to form a general partnership and if you want a medical reimbursement plan (only allowed in C-corps).

43:25 - How our consultations work along with entity upgrades.

45:35 - Reimbursement of trading expenses in retirement-plan accounts

46:55 - How to qualify for trader tax status, even later in the year. IRS rules, tax court cases and GreenTraderTax's golden rules.

55:45 - Electing Section 475 MTM in a new entity formed later in the year. The MTM election gamble if you have capital-loss carryovers.

58:25 - Net operating loss rules. The five-year NOL carryback choice is for 2008 only; 2009 reverts back to the two-year carryback rule. California and Hawaii don't allow NOL carrybacks. Will other states do the same? You can't amend tax returns to change an NOL election choice.

1:02:00 - Consultation archives. Formal memos are available.

1:04:00 - Dallas, Texas CPA asks a question about trader tax and MTM. Matching earlier year capital gains and if a new entity is formed with MTM for the rest of the year. We discuss the Texas margins tax and how it's avoided with a husband and wife general partnership . Be careful not to take MTM ordinary loss treatment on older investments with unrealized losses by trying to transfer those investment positions into the entity (Section 724b & c prevents this). Year-end tax planning; avoiding wash sales.

1:09:30 - MTM elections for existing taxpayers (externally with IRS) vs. new taxpayers (internal election).

1:10:25 - How long does it take to form a GreenTraderTax entity. Usually one to two days for our paperwork and three to five days more if it's an LLC or corp with a state turnaround.

1:13:00 - Forex traders don't have wash sales rules because of Section 988 ordinary gain or loss or 1256g MTM treatment.

1:14:00 - Traders Association discussion.

1:21:00- Mini 401k plans for trading entities and whether to use salary or fee arrangements (pros and cons).

1:23:00 - Closing remarks.

Thursday, August 6, 2009 - Traders Association:
(mp3 file, 9.7 MB download).

* Traders Association. Click here to read our blog published today on the Traders Association. We discussed this content and received good feedback and suggestions from callers. Brent Gillett JD explained how he can support the association as well. We are proceeding with your help, so please spread the word.
* Investment Management Business update from Gillett (09:15).
* FXCM UK update.
* Retirement-plan strategies. Caller asks what is the best way to proceed. withretirement-plan trading, vs. taxable account trading and factoring in trader tax status and entity issues.
* What to do on trader tax status and Section 475 MTM if you cease trading in a trading entity.
* Traders Association interaction.

Thursday, July 30, 2009: Foreign account tax matters and more:
(mp3 file, 8.4 MB download).
Sorry, it's unedited and the sound is not great, so using a headset may be preferable.

* IRS offshore account voluntary disclosure program expires on 9/23/09. Also read our blog article dated July 31, 2009 on this subject. We touch on this issue throughout the call today. Later on in area 55 minutes, we talk about the nuances of filing six years of amended tax returns with futures carrybacks, NOLs and foreign tax credits. Many traders also want trader tax status business expenses to apply to the non-disclosed foreign account trading activities to reduce the late filed taxable income amounts, so involving our firm is a wise move even if you have another firm in charge of your amended tax-return preparation. We are advising other CPAs and tax attorneys on these matters.
* Proposed rules for beefing up investment advisor registration requirements.
Advisors for smaller investment funds and managed accounts (under $25 million or $30 million in some cases) may still be exempt from registration under the proposed new regulations. Under the new tougher rules, advisors for larger funds and managed accounts may no longer use the exemptions used in the past to avoid registration.
* Foreign managed accounts and rules for Americans investing in offshore hedge funds (around 30 minutes into call). Do tax compliance requirements (Form 5471, TDF 90.22-1 and PFIC reporting) or lack thereof on the fund level impact American investors and their tax compliance? Yes, the investor could be liable if the manager botches fund-level reporting and compliance. For example, if the fund does not file the TDF 90.22-1, every investor might get hit with the $10,000 penalty as well for non-filing. Discussion of PFIC rules and how they impact Americans in offshore funds. Even though the funds are often set up as C-corps, they are treated as pass through entities for U.S. tax purposes. Americans should file QEF elections for PFIC reporting. Ask your offshore fund managers about this.
* How to do tax accounting on foreign accounts; the challenges, rules and other comments. It can be very difficult (around 35 minutes into call).
* FXCM UK accounts and UK tax matters (around 39 minutes into call). We are awaiting more answers here, but currently we think these are foreign bank accounts requiring foreign bank account reporting (simple information reporting on TDF 90.22-1). We currently think and hope that Americans not living in the UK aren’t subject to UK taxation on trading gains; similar to the rules in the U.S. for non-residents). We expect to have full answers soon. Discussion on the new UK flat tax on non-domiciled residents and the stamp tax, and how they are hurting London as a money center.
* Foreign tax credits should not be impacted with new tax legislation in the U.S. (around 52 minutes into call). Avoiding double-taxation among countries is a focal point of tax treaties. American traders living outside the U.S. can get extra tax benefits with Form 2555 foreign earned income and housing allowances exclusions. Filing amended returns for the voluntary disclosure program mentioned above can be confusing.
* Real estate funds and Green Energy Active Investor vehicles are more popular now (around 58 minutes into call). Green gives his op-ed commentary on the real estate bubble, overreaction to the bursting of the bubble and the inevitable rise again of real estate (and other asset classes and business). Plus, how to participate in and benefit from the coming green energy revolution.

Thursday, June 18, 2009
(mp3 file, 8.4 MB download, unedited raw recording).
June 18, 2009 Thursday Regular Weekly Conference Call (Free): 4:15 - 5:30 pm ET
We discussed most of the scheduled topics below.
Hosts for this part of the call: Robert A. Green, CPA/CEO of GreenTraderTax and Brent Gillett, JD of Investment Law Group of Gillett Mottern Walker, LLP.

* First 45 minutes of call:
Retirement plan strategies and services for traders, investors and managers.
Whether you want to trade in your retirement plans (securities, futures and/or forex), build them up with annual tax-deductible contributions, borrow money from your retirement plans for personal or business reasons, convert to a Roth IRA for permanent tax-free build-up (special one-time opportunity in 2010 relaxes income thresholds), or take early withdrawals with fewer tax pitfalls, we can help you accomplish your goals. Read our blog article on this subject here. Hosts for this part of the call: Robert A. Green, CPA/CEO and Mark Durham, MBA on retirement plans.
* Last 30 minutes of call:
Updates on trader tax, foreign futures, and state taxes.

Foreign futures update: A foreign futures exchange only receives Section 1256 (lower 60/40) tax treatment on selected instruments if the IRS expressly approves Section 1256 treatment in an official IRS pronouncement. See examples in Revenue Ruling 2009-4 and 2007-26 here. A no-action letter from the CFTC — allowing a foreign futures exchange to offer futures contracts in the U.S. under Rule 30.10A — may be a starting point for achieving this tax-advantaged treatment, but it's not enough on it's own. Recent IRS rulings and guidance have indicated that the IRS pronouncement itself is the deciding factor.
* Tax return strategy for futures traders. We now believe it is more appropriate for a futures trader to transfer only the 40 percent short-term ordinary income portion of 60/40 futures trading gains to Schedule C to zero out trading business expenses. You save even more taxes by not reducing any of the 60-percent long-term capital gains rate portion of futures trading gains. You need to explain it correctly on your tax return.
* Moving expenses: We are allowing moving expenses for more traders lately, as it otherwise can be a challenge. Check with us on your specific facts and circumstances.
* Foreign bank accounts: Don't forget you need to file TDF 90-22.1 by June 30, 2009. The IRS is very strict on this form now and the non-compliance penalties are very high. Consult with us if you have questions. Learn more about this requirement at the IRS site.
* State taxes: Not all tax increases are waiting until 2011. New York State passed temporary higher taxes on upper-income taxpayers effective for 2009, and tax advisors are telling their clients to increase their tax withholding accordingly.

'The Enacted Budget includes the largest increase — a temporary Personal Income Tax Surcharge for higher-income taxpayers. This will temporarily increase the marginal state personal income tax rate for higher-income filers for a three-year period from tax year 2009 to tax year 2011. For married couples filing jointly, the marginal rate will increase from 6.85 percent to 7.85 percent for filers with incomes above $300,000 and 8.97 percent for filers with incomes above $500,000.' Plus, if your New York state gross income is more than $1 million, you lose all your itemized deductions, except for 50 percent of charitable contributions (on the New York state/city tax return only).

I would not be surprised to see other states enact similar "temporary" tax increases; especially California. State budget problems are not temporary and their tax increases may not be either. These types of tax increases are easier to pass with the word "temporary" and unless they have a formal sunset provision like the Bush Tax cuts of early 2000s did, they may last longer. The Obama administration said no to California in the first round of rumored bailout requests.
* Updates on investment management businesses, including Obama's financial reform plan and more.
Requires advisors to hedge funds, private-equity funds and venture-capital funds — whose assets under management exceed some modest threshold — to register with the SEC under the Investment Advisers Act; allowing the agency to collect data from the firms. When the fine print is published, Green expects to see stricter registration rules with fewer or no loopholes then currently exist.

Thursday, June 4, 2009
Trader Tax and Investment Management Business
Q&A session: regular Thursday call
(Length: approx. 25 minutes, Filesize: 3.0mb)
Hosts for this part of the call: Robert A. Green, CPA/CEO of GreenTraderTax and Brent Gillett, JD of Investment Law Group of Gillett Mottern Walker, LLP.

* 00:30 - Full explanation and background of forex tax treatment and capital gains elections (including 60/40. What can and can't go into the lower 60/40 tax rates and even lower long-term capital gains rate treatment. How to make the election and information on carrybacks too. It's nuanced and confusing and these questions and answers provide clarity.
* 07:45 - Futures trader with questions on how to calculate gain and loss and accounting for commissions. Some brokers mistakenly report commissions separately from the 1099 for futures gains and losses.
* 10:00 - Customer set up partnership entity with GreenTraderTax and has been profitable to date. What are his next steps? Administration fee for AGI deductions (retirement plans and health insurance premiums). Advides to do TradeLog accounting now and year-end planning by fall or Q4. Review of overall accounting and planning too. Mini 401k retirement plans must be established (opened) before year-end. Our new self-directed trust accounts have lots of benefits. See separate call archive on that dated June 3, 2009.
* 13:00 - Estimated tax rules for traders. Are they required for trading partnership entities? Yes, but on the individual level. Safe harbor exceptions, nuances and special strategies for traders.
* 18:00 - Co-host Brent Gillett JD provides news of the week. New hedge-fund rules passed in Connecticut on disclosing material conflicts of interest (adopting SEC standards even for unregistered advisers).
* 20:20 - New "mini/master" offshore fund structures are becoming more popular for compensation deferral and carried interest breaks for offshore fund managers.
* 23:00 - Caller appreciates calls and request to spread the word. Call ends early this week, since we had a full call the day before (below).

Wednesday, June 3, 2009
Retirement Plan Strategies
Special Topic Call of the Week
(Length: approx. 50 minutes, Filesize: 6.0mb)
Co-hosts Robert A. Green, CPA and Mark Durham, MBA Retirement Plan Specialist.

* We cover our new retirement plan services for traders. Learn more at http://www.greencompany.com/Traders/TraderRetirement.shtml.
* This conference call was early on in our process. Robert Green did a major update on our retirement plan strategies in his blog article dated July 15, 2009. Click here to read this updated blog article; it clarifies some issues mentioned in this call.
* 09:00 - 22:00 First question and answers. Client formed entity with GreenTraderTax and asks how to integrate existing IRA into the new Mini 401k plan strategy. Rollover IRA vs. the Mini 401k vs. Roth features, and how they can work together.

Thursday, May 28, 2009
Trader Tax and Investment Management Business
(Length: 1:03, Filesize: 7.3mb)
Topics include:

* 0:00 Current Situation Remarks
* 0:03 Forex: new CR2-43b prohibits simultaneous long & short
* 0:15 Better way to implement this ruling
* 0:18 Tax return: entity might be better than dual occupation
* 0:22 Triggering SE tax as a floor trader
* 0:25 Avoiding SE tax with an S-corp
* 0:28 Investment management report
* 0:32 Supplier of market signals: license as investment advisor?
* 0:38 Usage of mutual fund hybrid
* 0:42 GreenTrader self-directed retirement plan
* 0:45 Options trader: be sure you meet the test
* 0:52 Abandon MTM? Probably no. Maybe use NOL carryforward
* 0:59 Futures traders: tax benefits

Thursday, May 21, 2009
Changing Standards
(Length: 1:09, Filesize: 7.9mb)

Topics include:

* 0:00 Current situation remarks.
* 0:01 Net capital for FCMs increased to $15 million.
* 0:02 Forex traders will take NFA Exam 3 and maybe Exam 34.
* 0:03 States examine registrations more closely.
* 0:05 Need one set of standards nationwide, not by states.
* 0:08 Registration required for somebody in trading chain.
* 0:17 Forex hedging rule change and Martingale strategy.
* 0:26 Legal standing of unregistered forex brokers.
* 0:29 Due diligence required for any FCM or FDM with whom you do business.
* 0:35 Example: trading in multi-country setup.
* 0:40 Speculation on big picture for regulation change.
* 0:45 Can sole proprietor trade retirement account?
* 0:55 Sole proprietor and home office deduction.
* 0:57 Is it okay to morph from trading equities to futures?
* 0:59 Is registration required to trade own money?
* 1:00 Recap of possible forex dangers.
* 1:04 Tax implications of moving account to UK.

Thursday, May 14, 2009
Trader Tax Updates
(Length: 1:11:10, Filesize: 8.1mb)

Latest news and views on trader taxation.

Topics include:

* 0:00 Current situation remarks from Robert Green.
* 0:04 Update on investment management businesses from Brent Gillett.
* 0:06 What are the tax effects of a forex account in foreign country?
* 0:13 Must file Form TDF90-22.1 for foreign financial account by June 30, 2009. http://www.irs.gov/businesses/small/article/0,,id=148849,00.html.
* 0:15 Be careful choosing foreign forex account and make sure your money is safe.
* 0:18 Only a "new taxpayer" (entity) can elect Section 475 MTM internally within 75-days of inception. Using an old entity for trader tax status and Section 475 can be more trouble than it's worth.
* 0:22 Current or proposed changes for CTAs with CFTC and NFA.
* 0:24 Tax deductibility of investment advisory fees is a serious problem. Investment expenses are usually very restricted (2 percent AGI limitation and AMT preference).
* 0:28 Political update on regulatory and tax matters affecting traders and investment management businesses.
* 0:38 Reminder: traders did not cause the meltdown and they should not be singled out to pay for the clean up.
* 0:39 Swap contracts and other over the counter (OTC) derivates could be forced on to new exchanges and that could be a whole new arena for traders.
* 0:41 What instruments look best from taxation viewpoint?
* 0:44 Trader status: toward a better set of tests.
* 0:48 For deductibility: There may be different ways to structure business.
* 0:50 Monitoring of futures trading, proper use of footnotes.
* 1:01 Trouble with TradeLog partial fill orders and how it was fixed.
* 1:04 More on FCMs and CTAs.
* 1:05 Forex accounting.

Thursday, May 7, 2009
Tax Topics
(Length: 1:05:20, Filesize: 7.5mb)

Question and answer on tax topics.

Topics include:

* 0:00 Deductibility of CTA fees likely a problem.
* 0:07 W2 income coupled with trading loss.
* 0:12 Brent: update on recent issues.
* 0:15 Sec475 and F3115.
* 0:20 New York City entity setup.
* 0:25 Be careful with wording on Sec475 election.
* 0:27 Managed accounts gaining in popularity.
* 0:41 Brokerage accounts must use the correct names.
* 0:43 Office in NYC? Some entity better register in NYC.
* 0:49 Payroll in your LLC? No, use administrative fee.
* 0:51 Remember your quarterly estimated tax payments.
* 0:54 Need to register if trading for a relative? Depends …
* 0:56 Current remarks on Beltway taxation trends.
* 1:02 What type of entity do I need?

Thursday, April 30, 2009
Current Tax Issues
(Length: 1:07:45, Filesize: 7.8mb)

Current political and legislative picture plus answers for specific tax situations.

Topics include:

* 0:00 Current situation remarks.
* 0:14 Forex spot/forwards proper reporting.
* 0:18 Clarify 1099 issue: commissions on futures.
* 0:22 Can you use IRA funds in an entity? Maybe, with care.
* 0:26 Getting MTM.
* 0:28 Clarify features of S1256 v S475.
* 0:33 Will 60/40 stick around?
* 0:43 Capital requirements: IA, hedge funds.
* 0:48 Trading in an IRA.
* 0:51 NOL reporting.
* 0:57 Any hope for change in capital loss limit?
* 0:59 Fix for failure to report wash sales.
* 1:00 Part-time trader factors.
* 1:03 Investment activities separate from trading business.

Thursday, March 5, 2009
Politics, Taxes, and the Active Trader
(Length: 1:26:13, Filesize: 9.9mb)

Are you politically active in defense of your trader business? Most traders focus on the mechanics of trading — that's great. But right now, you may want to pay attention to Potomac Fever. A review can save you hundreds or even thousands of dollars over its cost. Rapid change on the tax front can work against your prior plan.

Topics include:

* 0:01 OPM? Do you need a managed account for investor confidence?
* 0:03 Will traders be the scapegoat for 9/18 (investment world 9/11).
* 0:12 Offshore or foreign investor in your fund? What implications for everyone?
* 0:17 Do you need a review? Plan carefully to use up your capital losses.
* 0:21 Contact info.
* 0:23 MTM election done right?
* 0:26 Carryback draws IRS attention. Don't try this at home.
* 0:32 Use 3115 and perjury statement from the guide.
* 0:33 Plan the work! Work the plan! If you went off plan, do you need a review?
* 0:37 Do traders need their own PAC or similar? Or go gracefully to the guillotine?
* 0:48 Watch out for AMT on carrybacks and be glad you have an entity.
* 0:52 Ben Brown: what's happening out there? Get safe. Get third party validation.
* 0:54 Are you a victim of fraud — Madoff, Stanford, etc.? We have tax solutions.
* 0:55 Brent Gillett: fund setup costs.
* 1:03 Tax filing dates and related tax matters.
* 1:06 Fraud claims: limitations, interpretations. WSJ article.
* 1:13 How would an existing operation move to NorthPoint Trading Partners?
* 1:15 Implications: Hedge fund (straight) or commodity pool (managed account).
* 1:22 Another look at the political side of tax legislation.

Thursday, February 26, 2009
Worrisome Mood in Washington
(Length: 1:25:23, Filesize: 9.8mb)

We're playing close attention to the Beltway Bombast, and we hope you are, too. Planning to elect Trader status? Stay up-to-date on your TradeLog accounting. Get your documents together and send to your accountant now so you can file your extension on time. You may want to write Congress — they keep talking about a transaction tax.

Topics include:

* 0:00 Tax law changes.
* 0:10 Tax tips and prepare now for your extension.
* 0:16 Self-administered retirement plan.
* 0:18 Investment fraud and Ponzi schemes.
* 0:22 Defrauded? If it's return of capital, go for ordinary loss.
* 0:25 Proprietary trading the right way.
* 0:30 On Social Security and have trading loss? Need to file?
* 0:32 Transaction tax? Not yet, hopefully never, and not on spot forex.
* 0:34 Need to be broker dealer, or not? Sub-S LLC cost of entry.
* 0:36 Sec 475 can help you, even with a loss.
* 0:41 Receive a 1099 on forex? Not proper, but here's a safety move.
* 0:43 Forex may not fly under the radar forever.
* 0:47 Protection may come over investor concerns, but what's the fallout?
* 0:54 More on possible transaction tax.
* 0:57 Clarification: index option treatment.
* 0:59 TradeLog is the best software for cash basis or MTM.
* 1:04 Hedge fund for family or OPM? Demonstrating prior performance.
* 1:12 Should you have an entity, even with a loss?
* 1:15 Trading firms recruiting and asking you to pay? Watch your step.
* 1:23 Using C-corp for trading? Please, no!

We will soon be offering special GreenTrader conceived "self-administered" Mini 401k retirement plans (regular and Roth), as well as other types of retirement plans. Our plans will contain value-added features such as plan loans, the ability to trade on margin, futures and forex, and to make other types of investments (for example into hedge funds). Most brokerage firm (cookie cutter) retirement plans do not allow any of these features.

Topics include:

* 0:00 Self-administered retirement plans.
* 0:07 Meet Mark Durham.
* 0:11 New traders entering the market.
* 0:16 Do you need third party validation?
* 0:18 Small trading desk is the place to be.
* 0:24 Asset-based lending (ABL) focused funds savings.
* 0:27 Will 60/40 on commodities stick around?
* 0:35 New SEC Form D filing update rule.
* 0:38 IBD article on 60/40 rules.
* 0:43 Are you reporting spot forex correctly?
* 0:53 Trader status as retiree.
* 0:55 TradeLog software can help with wash sales reporting.
* 0:57 Clarification of self-administered retirement plan.
* 1:00 Gains on forex and quarterly estimate impact.
* 1:06 Care required in partnership with someone other than spouse.
* 1:14 Can you capitalize startup cost?

Thursday, February 5, 2009
Review Your Structure for the Coming Year
(Length: 1:14:46, Filesize: 8.6mb)

Savvy trader entity structures for tax savings. Check your setup now if you need action before April 15 or March 15 (S-corp).

Topics include:

* 0:03 Will you get stuck with losses you can't deduct?
* 0:07 GAAP versus taxation: Still two different worlds.
* 0:12 Liability issues: frontdoor vs. backdoor risk.
* 0:15 Your state of residence impacts your choice of structure.
* 0:18 Latest from D.C.
* 0:22 Impact of unincorporated business tax (UBT) on New York City residents.
* 0:27 Reversion to investor status from trader status, and vice- versa.
* 0:29 Protecting your MTM election.
* 0:33 Liability issues revisited with Brent Gillett.
* 0:37 Options for single traders.
* 0:42 Hedge-fund transparency.
* 0:45 General guidelines for trader status.
* 0:49 Custody of funds: Third-party affirmation may be important.
* 0:55 More on states and structure.
* 0:58 Dissolving an entity.
* 1:00 Arranging your affairs to achieve trader status.
* 1:05 Entity may help avoid scrutiny.
* 1:10 Wash sale rule is very broadly applied now.

Thursday, January 29, 2009
Improve Your Financial Engineering
(Length: 1:14:59, Filesize: 9.1mb)

More tips and techniques for getting started on the right foot and improving your future in 2009.

Topics include (times are approximate):

* 0:01 Trading for others: Small mutual fund?
* 0:15 RediPlus and ThinkPipes trading automation.
* 0:19 Changes for CTAs.
* 0:23 Wash-sale rule clarification.
* 0:30 ETFs: Taxation varies, but rules may not follow logic, so watch out.
* 0:35 NOLs are great unless your trader status is on slippery footing.
* 0:38 Clarification on AMT and NOL.
* 0:44 Will an entity protect you from Schedule C traps?
* 0:52 Write Congressman Peter DeFazio regarding the transaction tax.
* 0:58 Trading for others: be careful and use the correct structure.
* 1:04 Switching from Schedule C to LLC in mid-year.
* 1:07 Incubator fund to establish a track record

Thursday, January 22, 2009
Entity Strategies: Avoiding Snares
(Length: 1:04:02, Filesize: 7.5mb)

Your entity structure is intimately entwined with how you run your business, the deductibility of expenses and what you can legally do within that business. Proper guidance is imperative for accomplishing your goals — there is no such thing as an "off-the-rack" business structure for traders. Informed counsel is essential to avoid putting yourself in a box. Will your business model be able to take advantage of every tax-saving opportunity?

Topics include

* Will a small mutual fund be in your future?
* Write your congressman and senators about the transaction tax.
* Forex: Commodity trading advisor update on registration news.
* Trading for others: Has the agreement with your broker inadvertently made you an introducing broker?
* Compensation and entity structure: pitfalls to avoid.
* Trader vs. investment manager.
* Using dark pool to safely trade illiquid, low-V stocks.
* Passive foreign investment company (PFIC): Useful in special situations, but be careful.

Thursday, January 15, 2009
(mp3 file, 9.1 MB, 79:09 length).
Recommend a headset since the sound volume is lower on this recording.

Table of contents

00:00 - Introduction remarks from Green. Year end tax planning.

6:00 Brent Gillett JD. Galleon hedge fund insider trading case. Dark pools may be more regulated, as was recently done for flash trading. Transparency versus anonymity.

17:00 Question. Roth conversion questions.

19:58 - Money manager outside US. Tax treatment and related issues. Foreign accounts need to be reported too.

25:00 - Good idea to use an attorney like Gillett for investing with money managers; both for managed accounts and hedge funds. Inappropriate money management schemes, due diligence, proper structures and more. Gillett's has new services in this area, a separate firm Alternative Diligence.

32:10 - Proprietary trading firm agreements and tax matters. Being at risk for your share of leverage and related trading losses. Cross collateral and related risks. Due diligence, risk management systems and more.

36:00 - Foreign partners in a US prop trading firm usually do not have US source income (ECI) in the US and therefore do not owe US income taxes. Unless the prop trading firm has other sources of income besides trading, like commissions or educational services. There is an exemption for capital gains.

37:15 - UBIT issues in retirement plans. Leverage with securities leads to UBIT. No UBIT with futures and forex. But there is UBIT in some ETFs, if they have leverage built into the ETF.

38:15 - Question. 2009 trader asking about the best entities for traders. Discussion of LLCs, S-Corps, and general partnerships. It's appropriate to add a C-Corp to the mix, as a second entity, when you want a medical reimbursement plan and other fringe benefit plans. Single person trader in CA, and what's best for them versus a husband and wife team.

47:30 - Financial-transaction tax update. See the latest blog update on 10/21 too. Green's latest opinion on this tax, bonuses and more.

65:30 - Question about retirement plan loans. Early withdrawal taxes and penalties versus loans.

68:45 - Question about estimated taxes and year-end strategies.

71:40 - Viral marketing opportunitities for money managers and how to stay clear of selling a private security in public forums (which is big trouble). We covered this on our 10/08 call in detail.

76:10 - Moving retirement accounts to a Mini 401k. Do you loose any ERISA protections?

Ending remarks.

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