Filing tax return as Trader Status and Mark to Market Election

Quote from nbates:

Easy, stop trading...lol
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really? i don't think so..

http://fairmark.com/forum/read.php?3,34761

http://www.traderstatus.com/trader.htm

If you have made a valid election under section 475(f), the only way to stop using mark-to-market accounting for securities is to request and receive written permission from the Service to revoke the election. Non-filing of the Form 3115 mentioned above will not invalidate a timely and valid election. To request permission to revoke your election under section 475(f), you must file a second Form 3115.
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...duh, Dude...it's talking about Securities and if you have NONE then it (Market to Market, Schedule D and all that JAZZ) does not apply, lol
 
Quote from nbates:

...duh, Dude...it's talking about Securities and if you have NONE then it (Market to Market, Schedule D and all that JAZZ) does not apply, lol
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Please stop giving incorrect tax advice on here, if you don't know, don't post!

You indeed have to formally change your accounting method with the IRS, when you cease to file MTM..
 
... and be prepared to provide brokerage statements. There are IRS docket examples of hedge fund managers who were denied "trader" status treatment because they didn't trade at a frequency unilaterally deemed by the IRS to be active enough. The IRS unilaterally audited them and changed everything to "investor" status, along with a notice for more taxes - so, all income was treated as ordinary, and lots of expense deductions were disallowed.
 
I've spoken with the greencompany and it seems that I meet the requirements to form an entity to recieve trader status through the eyes of the IRS.. However, since I don't have much EXPENSES it doesn't seem like it's worth forming my trading as a business to recieve write offs.

Am I missing something here?

It will cost 1k to form the entity (with my location) and I will recieve about 5k in write off's.. (I don't have insurance or a retirement plan to write off)

I know it differs from person to person, but I thought having your trading as a business would be much more beneficial than 5k a year in write offs..

Anyone with an entity for there trading , please tell me more reasons why I should do the same , but right now I'm not too inspired to continue on with this project ..
 
form LLC cost about 125$ if you prepare and file yourself. that's in PA. fees may vary from state to state,but they certainly lower than 1K. amount of paper work...fill about 1 page with name of corporation and members. i would spit in the face of this fucker,who ask 1K for this kind of job. same for tax preparation. one CPA slap me with $700 bill for very simple return for 1065 and 3 K1's..fucked up everything. SS numbers,post profits as ordinary income etc..when we talking about his charges he said-his rate is 100$ in hour.. mean that this dummy spend 1 day preparing my corp taxes,where every single number is prepared and provided by me.the another CPA did same job for $50 right on front of me in about 15 min max.

there is some advantages in M2M election(which i didn't file yet). primarily in wash sales(another 5K in taxes for me for 2009)..so..5K here..5K there....dunno about you,but that's money for me..
but it's still not clear to me how you revoke this election. probably the best you can do is file some forms to IRS and then dissolve the company...but if you elect yourself as an individual-have no idea..i've heard and you have to write a letter(and receive approval) to IRS commissioner. kinda doubt that he will respond to any letter.
 
Quote from Bob111:


there is some advantages in M2M election(which i didn't file yet). primarily in wash sales(another 5K in taxes for me for 2009)..so..5K here..5K there....dunno about you,but that's money for me..
but it's still not clear to me how you revoke this election. probably the best you can do is file some forms to IRS and then dissolve the company...but if you elect yourself as an individual-have no idea..i've heard and you have to write a letter(and receive approval) to IRS commissioner. kinda doubt that he will respond to any letter.
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If you are an individual who declared MTM, what reasons would cause you to want to revoke it in the future?
I'm under the impression that if you stop trading, or stop trading enough to qualify for trader tax status, then you simply automatically revert back to non-MTM status (i.e. investor status).
 
then you simply automatically revert back to non-MTM status (i.e. investor status).
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i've mentioned this above, but finally found info on IRS site-

http://www.irs.gov/taxtopics/tc429.html

If you have made a valid election under section 475(f), the only way to stop using mark-to-market accounting for securities is to request and receive written permission from the Service to revoke the election. Non-filing of the Form 3115 mentioned above will not invalidate a timely and valid election. To request permission to revoke your election under section 475(f), you must file a second Form 3115.
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the question is -what's going to happens, if permission is not granted?
 
Quote from DataCruncher:

If you are an individual who declared MTM, what reasons would cause you to want to revoke it in the future?
I'm under the impression that if you stop trading, or stop trading enough to qualify for trader tax status, then you simply automatically revert back to non-MTM status (i.e. investor status).
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This is NOT correct information, you have to file form 3115 with the IRS amigo, to change your accounting method. Who told you it reverts back, that is absurdo!

I really wish folks that are not CPA's or qualified to give tax advice would stop giving out bad information on here.

http://www.irs.gov/pub/irs-pdf/f3115.pdf

surdo
(not a CPA)
 
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