Proprietary traders have ordinary business expenses like salaries and overhead that get declared as K-1 line one losses every year.  And, the gains are capital gains, some long-term, some short-term and some are straddle gains.

Form 461 generally limits the losses to $250,000 and carries the rest over to the next year, subject to losses in the next year.

This doesn't make sense since it will be ordinary losses every year.

can we adjust Form 461, line 8 for the capital gains to allow the losses?