Sec. 475 Mark-to-Market Election Question?

Forum|Forum|4 years ago
July 26, 2021
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For my seasoned daytraders, I recently took up daytrading and I heard about the tax stuff and got a little scared. So my question is Sec. 475 Mark-to-market Election. In order to claim it for the 2021 Tax year, can I file the election when I file my taxes in 2022 for 2021? Or Did I need to file last year for this year?

I know, noob question, but a serious one. So please help, because my opinion is that it would not make sense to have to file an election for the current year in a previous year. Like literally until about a month and half ago, I had no idea I was going to take up daytrading. Decided to give it a go and I am up overall, but I traded some of the same stocks without waiting for the 30 day rules. So my issue is that even though I am up 7.6% overall, will the IRS be like "nah you are actually up 50% overall" and tax the hell out of me. Which at that point, I need to stop now and maybe get back to it next year.

So please help an aspiring daytrader.

Not A Product Question

M-MTax

You need to consider making the MTM election carefully as it's somewhat involved and may not be what you want. In answer to your question re filing.......A trader must make the mark-to-market election by the original due date (not including extensions) of the tax return for the year prior to the year for which the election becomes effective.....https://www.irs.gov/taxtopics/tc429