Category: Trading
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Who Qualifies as an Accredited Investor? A Look at How the SEC’s Definition Has Evolved
An accredited investor is someone the SEC considers financially sophisticated enough to invest in private offerings—such as private equity, hedge funds, or venture capital—without the full disclosure protections required for public investments. The concept didn’t exist until 1982, when the SEC introduced it under Regulation D, Rule 501(a) to streamline capital raising while ensuring only…
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Brief Guide to 1256 Contracts
Section 1256 (“§1256”) contracts get are marked to market (MTM) at year-end and gains/losses are split 60% long-term / 40% short-term, regardless of your actual holding period or if you have actually closed your position. Congress created §1256 to curb year-end derivatives games (closing losses, letting winners ride) by imposing the mark-to-market rules at a…
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Identifying §1256 Contracts, §1092 Straddles & Hedging Transactions
Most broker statements don’t explain why certain trades show up under different tax buckets. If you’ve ever wondered why you see a “Section 1256 gain/loss (60/40)” line, or why a loss didn’t reduce your taxes because of a “straddle,” this guide is for you. Below is a quick guide how to spot §1256 contracts, recognize…
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Wash‑Sale Rules: What Investors Need to Know (Fast Guide)
Why this matters… The IRS wash‑sale rules prevent investors from creating tax losses without changing their economic position. If triggered, your current‑year loss is disallowed and added to the cost basis of the replacement shares—affecting future gains or losses. When a wash sale is triggered… • You sell a security at a loss and buy…