One screen for the whole trading book: what the engines found, what they routed, and what this workstation deliberately will not model. Every figure is a modeled range awaiting professional ratification — nothing here is a position.
Standing flags — open until a professional clears them
- Spot-crypto wash-sale status — §1091 inapplicable to spot crypto under current law (Notice 2014-21 property treatment; OBBBA did not extend). Legislative-change watch is live; year-end planning assumes current law only while that holds. crypto1091: inapplicable-spot
- §67(g) investor-expense treatment — post-2025 status is config-dated; investor-branch expense figures render only against the verified config.
- QSBS caps indexing — the $15M per-issuer cap indexes after 2026; figures carry the as-of stamp.
- 1099-DA first year — broker basis reporting effective 2026; Box A/B/C mapping depends on issuer coverage and reconciles in the vault.
The deliberate-NO list
Positions this workstation will not model as defensible, by design:
- Mechanical same-day crypto loss harvesting presented as risk-free — the current-law branch renders, but so does the economic-substance doctrine risk.
- Trader status asserted without a contemporaneous log and hours substantiation.
- §475 ordinary treatment applied to positions never covered by a signed election.
- QSBS exclusion claimed without issuer-level eligibility certification.
- Anything on the current IRS Dirty Dozen (config-dated feed).
Investor or trader is the fork everything else rides on. It is a facts-and-circumstances determination — this engine computes both branches side by side, shows the delta, and routes the call to the CPA. It never defaults the answer.
Investor vs. trader — both branches routed
Investor branch
- Gains/losses capital — Schedule D / Form 8949
- Trading expenses not deductible while the §67(g) suspension state holds config-dated
- Investment interest limited by §163(d)
- LTCG rates preserved on long holds
Trader branch (TTS)
- Expenses move to a business schedule — deductible
- Gains stay capital unless §475(f) is elected
- Home-office lane opens (§280A, gated)
- Plan access only via a comp-paying entity — bare trading gains are not earned income
Show the math & law
Evidence object: contemporaneous trading log + hours substantiation — missing. The trader branch stays modeled until it exists.
For a taxpayer with trader status, the §475(f) mark-to-market election is the central lever: ordinary treatment and no wash-sale wall, traded against the loss of capital rates and QSBS eligibility. Both branches compute; the CPA signs the method.
Elect vs. don't elect routed determination
No election — capital
- §1091 wash sale applies — — disallowed into basis
- §1211 wall: net losses capped at $3,000/yr against ordinary
- LTCG rates + QSBS eligibility preserved
§475(f) elected — ordinary
- Year-end open positions marked to market
- Wash-sale wall falls away — disallowance restored
- Losses ordinary, not capital-limited
- LTCG and QSBS forfeited on marked positions
Show the math & law
Evidence objects: election statement missing · Form 3115 / §481(a) missing · §475(f)(1)(B) segregation identifications missing
Two different laws live here. Securities ride §1091 — the 61-day window, basis addback, and the cross-account traps. Spot crypto, under current law, does not — and this workstation says so honestly, alongside the risks that survive anyway.
Securities branch — §1091 applies
| Rule | Rendered |
|---|---|
| 61-day window (30 before / 30 after) | enforced per lot |
| Cross-account + spouse aggregation | reconciled in vault — brokers report within-account only |
| IRA repurchase | permanent loss — no basis to adjust |
Spot-crypto branch — §1091 does not apply watch live
Both counterweights render:
- Crypto held through a security (spot ETF) is a different lane — §1091 can reach it.
- Mechanical same-day harvesting can draw economic-substance / substance-over-form scrutiny even without §1091 — and 1099-DA basis reporting is live for 2026.
The harvest, valued honestly — NPV twin timing, not free money
The loss saves tax now — and resets basis lower by the same amount, so the gain comes back at the eventual sale. Only two things are truly gained, and both render:
Repurchased lot goes long before sale
- Face tax saved now at the short-term rate: —
- Repaid later at the long-term rate — the character arbitrage is real: —
- Plus time-value on the deferral: —
Sold short again
- Same rate both ends — the character component is zero
- Only the time-value survives: —
- Every harvest cycle re-runs doctrine-risk review — the pattern, not the trade, is what the CPA gates
Show the math
Property treatment means every disposition is a taxable event — including coin-to-coin — and every receipt at fair market value is ordinary income that sets basis. This engine tracks lots, splits the income lanes, and keys reporting to the 1099-DA.
Disposition engine
| Event | Proceeds | Gain/(loss) | Lane |
|---|---|---|---|
| BTC → USD (2 lots) | $84,200 | +$21,400 | LT capital |
| BTC → ETH taxable | $36,900 | +$4,100 | ST capital — disposition of BTC |
| SOL → USD (harvest) | $52,300 | −$34,000 | ST capital — see wash engine |
| wallet → wallet (own) | — | — | non-taxable same owner |
Show the law
Ordinary-income intake at FMV
| Source | FMV at receipt | Then |
|---|---|---|
| Staking rewards (ETH) | $6,200 | ordinary now · basis set for later disposition |
| Airdrop (governance token) | $740 | ordinary on receipt |
NFT positions route to the §408(m) collectibles question — up to 28% LTCG where applicable. routed
Evidence objects: per-lot basis records seeded · 1099-DA reconciliation pending — first issuer year · foreign-exchange FBAR/8938 screen attorney/CPA-gated
Regulated futures and broad-based index options are marked to market by statute — no election needed — and blend to 60% long-term, 40% short-term regardless of holding period. Whether a given product is a §1256 contract is itself a routed classification.
The 60/40 blend
As §1256 — 60/40
- 60% long-term at LTCG rate · 40% short-term at marginal
- Marked to market at year-end, regardless of trader status
If not §1256 — all short-term
- Whole result at marginal rate
- Classification support is the evidence object
Show the math & law
The portfolio's single gains layer. Holding period drives short- vs. long-term, NIIT overlays above threshold, and the special lanes — QSBS, §1045, §1244 — render both regimes honestly. The equity-compensation module routes its QSBS and rollover questions here; there is no second gains engine anywhere in the portfolio.
QSBS §1202 — two regimes by acquisition date routed
Post-OBBBA (§70431)
- Per-issuer cap: greater of $15M or 10× basis indexes after 2026
- $75M aggregate-gross-asset test
- Unexcluded 3/4-yr gain at 28%
Pre-OBBBA (old regime)
- Greater of $10M or 10× basis
- $50M aggregate-gross-asset test
Evidence object: issuer-level eligibility certification missing — the exclusion stays modeled until certified. C-corp original issuance only.
The §1211 wall — and the lanes beside it
| Lane | Treatment |
|---|---|
| §1244 small-business stock loss | ordinary up to $100K MFJ / $50K single — original-issue C or S corp routed |
| NIIT §1411 | 3.8% over threshold — applies both §475 branches (trading business in financial instruments) |
| NFT collectibles | §408(m) — up to 28% LT lane routed |
An entity can house trader-status expenses, pay the compensation that unlocks retirement and health lanes, and keep clean books. What it cannot do is convert an investor into a trader — substance decides, and this workstation says so.
Trading entity — what it does and doesn't do
- Does: houses TTS business expenses; resets the §475(f) election clock for a new entity (2 months 15 days from formation); provides the comp vehicle for plan access.
- Doesn't: create trader status by itself — the case-law factors still decide. routed
- Earned-income reality: trading gains — even §475 ordinary — are generally not self-employment earnings; solo-401(k) / defined-benefit access needs papered compensation.
Deliberately not in this engine
§469 passive-activity rules and personal-holding-company exposure are generally not the trader's questions — they live in the lending and property verticals. This engine omits them on purpose to avoid mis-routing. What remains routed here: the S-corp comp band, the plan lane, and the §475 clock for any new entity.
Evidence objects: comp study missing · executed fee/comp agreement missing
Who owns what, and where the money moves. Solid boxes are papered; anything routed renders in slate and waits for its professional.
Every capital movement, papered or flagged. An unpapered movement never disappears — it renders red until its instrument exists.
| Date | Movement | Amount | Instrument | State |
|---|---|---|---|---|
| 2026-01-06 | Member contribution → LLC | $250,000 | contribution memo | papered |
| 2026-02-14 | Brokerage → futures account | $60,000 | internal transfer record | papered |
| 2026-03-22 | Exchange → cold wallet | 1.4 BTC | same-owner transfer log | papered · non-taxable |
| 2026-05-30 | LLC → personal (draw) | $18,000 | draw memo | unpapered |
The objects each lever needs before its badge firms up. Uploaded is not verified — verification happens on the professional side, never here.
| ID | Object | Feeds | State |
|---|---|---|---|
| MKT.evid.log | Contemporaneous trading log + hours | trader-status gate | missing |
| MKT.evid.electstmt | §475(f) election statement | MTM engine | missing |
| MKT.evid.f3115 | Form 3115 + §481(a) computation | MTM engine | missing |
| MKT.evid.segid | §475(f)(1)(B) segregation identifications (dated) | MTM carve-out | missing |
| MKT.evid.lots | Per-lot basis records (all venues) | digital assets · gains | uploaded · seeded |
| MKT.evid.recon | 1099-B / 1099-DA reconciliation incl. cross-account wash | wash engine | pending |
| MKT.evid.qsbscert | QSBS issuer eligibility certification | capital-gains engine | missing |
| MKT.evid.comp | Reasonable-compensation study | entity levers | missing |
What's papered, what's routed, what's honestly open — the file a professional would actually want on the desk if the book were examined.
| ID | Item | Lane | State |
|---|---|---|---|
| MKT.char.tts | Trader-status determination — both branches computed | CPA | routed · pending |
| MKT.pos.475 | §475(f) method — elect vs. don't, delta shown | CPA | modeled |
| MKT.char.washrec | Cross-account §1091 computation | BK → CPA | prepared · unreviewed |
| MKT.pos.cryharv | Crypto harvest — current-law branch + doctrine-risk branch | CPA | routed |
| MKT.char.1256 | §1256 classification per product | CPA | routed |
| MKT.pos.qsbs | QSBS exclusion — regime by acquisition date | CPA | modeled — cert missing |
Derived clocks, not reminders someone typed: each date is computed from a statute, an election window, or a transaction on the book.
| Clock | Date | Derived from | State |
|---|---|---|---|
| §475(f) election — TY2026, existing taxpayer | 2026-04-15 | Rev. Proc. 99-17 · prior-year due date | window closed |
| §475(f) — new-entity path | formation + 2m 15d | Rev. Proc. 99-17 | routed |
| Q3 estimated payment | 2026-09-15 | §6654 schedule | upcoming |
| §1045 rollover — if QSBS sold | sale + 60 days | §1045 · held >6 months | per-sale clock |
| §1256(d) loss carryback — if net loss | 3 prior years | §1256(d) · against §1256 gains only | routed |
| 1099-DA reconciliation | on issuance | first broker-reporting year (2026) | pending |
The aide explains what a panel means and where its law comes from. It is on the same leash as everything else here: it never renders a position, never picks a branch, and always names the professional who does.