Final answer:
Sarah's extensive buying and selling of securities, as evaluated by the IRS, suggests that her activities are akin to a business operation, which classifies her as a securities' dealer. This designation is made because a securities' dealer is identified as someone who regularly engages in buying and selling securities for their own account, similar to a business.
Step-by-step explanation:
The Internal Revenue Service (IRS) designates different levels of participation in the stock market when it comes to taxation and the classification of investors and their activities. The scenario describes Sarah as someone who extensively buys and sells securities and has been determined by the IRS to be in a trade or business concerning the securities' transactions. The classification for Sarah is dependent on her activities with respect to these transactions.
An active trader is someone who executes many trades throughout the year, often looking to capitalize on short-term market events. In contrast, an active investor typically buys and holds securities but still makes frequent trades based on long-term strategies. A day trader engages in the business of executing several trades within a single day. Lastly, a securities' dealer is a person or firm in the business of buying and selling securities for their own account.
Given the provided information that Sarah extensively buys and sells securities and is considered to be in a trade or business by the IRS, the most appropriate classification of her activities would seem to be option (d) a securities' dealer, as this implicates a level of regularity and involvement in securities transactions akin to a business operation.