Mark to Market - "Trader" Tax Status

Technical topics regarding tax preparation.
#21
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14-Jan-2021 4:58pm
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Texas
Doug M wrote:
Have a C Corp electing mark to market treatment for 2021 (calendar year taxpayer)


As per my #2 post, the notice states:

the taxpayer must file a statement that satisfies the requirements in section 5.04 of this revenue procedure. The statement must be filed not later than the due date (without regard to extensions) of the original federal income tax return for the taxable year immediately preceding the election year and must be attached either to that return or, if applicable, to a request for an extension of time to file that return.

So, did you attach this information to your 2020 C corp return timely filed return without the extension? Or attached to the extension?

The Notice is not going to allow you to hindsight the transactions for the first 4 months of 2021 and say "Geez, I got all these losses, how can I get around the $3,000 cap loss rule"


Yep, the OP was from a while ago. Returns were done in early March and sat around until early April and were filed then.

As for why a C Corp - I still don't know. Right now, they are actually paying less taxes due to filing as a C Corp, but that wouldn't have been the case when the structure was setup. And I don't deal with the majority owner at all.

Yes, they are certainly trading on margin. Just based on the overall numbers it looks like they trade, on average, the full account value every 1.5-2 days. So they certainly would have run up against trade violations without margin.
 

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