I've been trading about 6 months now. I have a question about tax which is 35% of our profits. Here's the example
Lets say you made $50,000 and loss $30,000 for the year
That means you made a profit of $20,000
But based on wash sale rule, you have to pay 35% based on your gains which is $50,000 x 35% = $17,500
Which you will end up making $20,000-$17,500 =$2,500
But if you elected Mark to Market Election, you will pay tax on your profits only which will be
$20,000 x 35% = $7,000
So you end up making a profit of $20,000-$7,000 = $13,000
So my question is, Any experience trader here elect the Mark to Market Election? (Schedule D) Because the wash sale rule really eats up all our profits.
Lets say you made $50,000 and loss $30,000 for the year
That means you made a profit of $20,000
But based on wash sale rule, you have to pay 35% based on your gains which is $50,000 x 35% = $17,500
Which you will end up making $20,000-$17,500 =$2,500
But if you elected Mark to Market Election, you will pay tax on your profits only which will be
$20,000 x 35% = $7,000
So you end up making a profit of $20,000-$7,000 = $13,000
So my question is, Any experience trader here elect the Mark to Market Election? (Schedule D) Because the wash sale rule really eats up all our profits.