Market to Market election
- Thread starter Rowan128
- Start date
Is Joe Schmo flat, i.e. have were all the trades closed when the year ended? If so then I would say: No, not with regard to trading anyway? Did Joe Schmo work anywhere else or have another income stream? And welcome to wonderful world of carry fowards: :-S (yes i'm being sarcastic).
If your capital losses exceed your capital gains, the amount of the excess loss that can be claimed is limited to $3,000, or $1,500 if you are married filing separately. If your net capital loss is more than this limit, you can carry the loss forward to later years.
its too late to make the m to m election for this year.
There would be no taxes paid this year and there would be a NOL carryover to the following year that could be used against any future profits.
If he is married and files a joint return with his spouse, then he may be able to use some (or all) of the loss to offset his spouses income. Or if he has some other form of ordinary income, he may be able to offset this income with his loss.
This is assuming that M2M was made before the April 2005 deadline.
Disclaimer: I am not a practising tax accountant and believe that any serious tax questions should be asked of an accountant familiar with Trading tax laws.
PS, using the name Joe Schmo may raise a red flag with IRS. He should petition for a name change.
If he is married and files a joint return with his spouse, then he may be able to use some (or all) of the loss to offset his spouses income. Or if he has some other form of ordinary income, he may be able to offset this income with his loss.
This is assuming that M2M was made before the April 2005 deadline.
Disclaimer: I am not a practising tax accountant and believe that any serious tax questions should be asked of an accountant familiar with Trading tax laws.
PS, using the name Joe Schmo may raise a red flag with IRS. He should petition for a name change.
Quote from macal425:
There would be no taxes paid this year and there would be a NOL carryover to the following year that could be used against any future profits.
If he is married and files a joint return with his spouse, then he may be able to use some (or all) of the loss to offset his spouses income. Or if he has some other form of ordinary income, he may be able to offset this income with his loss.
This is assuming that M2M was made before the April 2005 deadline.
Disclaimer: I am not a practising tax accountant and believe that any serious tax questions should be asked of an accountant familiar with Trading tax laws.
PS, using the name Joe Schmo may raise a red flag with IRS. He should petition for a name change.
If Joe Schmo generated $50K in net losses trading for the year, and he is married, I suggest that he contact a good family law attorney, because he's about to get divorced -- he just doesn't know it, yet.