Tax question

looks like you have to elect trader and mark to market status by april 15th. So if you want it for 2007 you need to do it with your 2006 tax return.

So if it looks like you are going to have a down year, by April 15 you need to file for trader mark to market status so that if in fact you do finish down, you can offset previous year's trading profits with this year's losses and get a tax refund????
 
He is still liable for Tax Year 2006 by April 17th 2007.
The interest clock kicks in even if he files an extension.

I would file an extension, hire a very creative CPA and not panic.
Some "expense's" can be filed from 2007 in a NOL carryback vs last year.

Next time Lose money first then Gains will not be taxed!

el surdo
 
Quote from silk:

looks like you have to elect trader and mark to market status by april 15th. So if you want it for 2007 you need to do it with your 2006 tax return.

So if it looks like you are going to have a down year, by April 15 you need to file for trader mark to market status so that if in fact you do finish down, you can offset previous year's trading profits with this year's losses and get a tax refund????
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No see, that's the whole point. They don't want you to "game" the system. Either select MTM or don't. Don't go back and forth depending on whether or not you will have an up year or not. In my opinion, I think you should elect MTM if you are a retail trader regardless. If you are K-1, it makes no difference.

BTW, I know a lot of people who were burned in 2000 for having huge tax bills but lost it all after the tech meltdown. So they owed 100's of thousands in taxes on money they no longer had.
 
Sure you can, if u don't elect MTM, you can still do that but limited to 3k max previous year loss offset against current year cap gains. MTM changes ur income to ordinary income vs. cap gains, which has no limitation to how much losses in prev year u can offset vs gains in future *AND* X number previous years.

Silk's example is one of the main reasons they created the MTM election. I understand that once u elect MTM, you're MTM, meaning it's difficult to reverse it.

Quote from Maverick74:

cannot retroactively go back and get last years losses to offset this years gains. I am not an accountant but I am pretty sure about this.
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