One method to write off paper losses against CC income is to use Market to Market accounting. The end of the year the paper gains and losses of all positions are adjusted to the price the last day of the year. This assists with large underwater stocks. The new adjusted price becomes the new cost for tax purposes so you are only deferring the gains tax until the positions recovers.
Market to Market can be done by Active Traders. I have set up an LLC to do my trading in. This helps to establish the trading as a business for IRS purposes and permits immediate establishment of Market to Market accounting for trades.Several sites are available on the internet about this topic.
I use Traders Accounting. www.tradersaccounting.com Here is another site with information
http://www.armencom p.com/mark- to-market. html
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