How are day traders taxed?

Answer:
Day traders who didn't lose money on their trades are taxed at normal income tax rates, or the same rate that a short-term capital gain would be taxed.

One thing to note is that day traders are sometimes subjected to the wash-sale rule because they trade the same stock over and over again. This rule means that a trader must delay their tax loss on a losing trade if they bought the same stock again within 30 days of the sale. See for further information: http://en.wikipedia.org/wiki/Wash_sale

First answer by Jmowreader. Last edit by Fuzz head. Contributor trust: 10 [recommend contributor recommended]. Question popularity: 3 [recommend question].

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