Trading losses as a retail trader

You need the Premier version. Enter your trades in the Investment section. If you have not elected and submitted the Mark-to-Market (MTM) accounting method, then your entries will be on Schedule D.

Transactions as an investor (for example, selling a long-term holding) cannot be considered to be income associated with your business as a trader.

Trader status must meet the following qualifications every year.

The law considers this to be a business. To be engaged in business as a trader in securities, you must meet all of the following conditions:

• You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation;
• Your activity must be substantial; and
• You must carry on the activity with continuity and regularity.

Your Mark-to-Market election must be timely.

A trader must make the mark-to-market election by the original due date (not including extensions) of the tax return for the year prior to the year for which the election becomes effective.

For more information, please see this LINK