if you are saying you made the election for which you believe you did not qualify run to a tax pro to research your options
otherwise
If you've made a valid election under section 475(f), the only way to stop using mark-to-market accounting for securities is to file an automatic request for revocation under Revenue Procedure 2019-43, Section 24.02. Under that revenue procedure, the request for revocation must be filed by the original due date of the return (without regard to extensions) for the taxable year preceding the year of change (the year of change is the first taxable year the revocation is to be effective). This revocation notification statement must be attached to either that return or if applicable, to a request for extension of time to file that return. Late revocations won't generally be allowed except in unusual and compelling circumstances
assuming you made a timely election in 2020 for the election to be effective for 2021, you suck with it for 2021. .if you didn't include a revocation request by 4/15/2022 or with a timely filed extension for 2021, you're stuck with it for 2022.
for the year of revocation must be filed see a tax pro so that the proper filings and adjustment for unrealized gains or losses are done
rev proc 2019-43 section 24
..02 Taxpayers requesting to change their method of accounting from the mark-to market method of accounting described in § 475 to a realization method.
(1) Description of change. This change applies to any taxpayer requesting
permission to change its method of accounting for securities or commodities as defined
in § 475 from the mark-to-market method of accounting described in § 475 to a
realization method of accounting. For example, this section 24.02 applies when a
taxpayer is required to change its method of accounting to a realization method after
revoking an election under § 475(e), (f)(1), or (f)(2). This change is not limited to a
change required by § 475 (for example, this section 24.02 applies to a change from a
mark-to-market method of accounting for notional principal contracts providing for
nonperiodic payments even if the taxpayer is not subject to § 475) and, in such a case,
references to § 475 in this section 24.02 are interpreted accordingly. For purposes of
this section 24.02, a change to a realization method of accounting includes a change in
which the taxpayer also is required to use a mark-to-market method of accounting under
a specific Code section to account for all or some of the taxpayer’s securities or
commodities (for example, § 1256 for commodities).
(2) Exclusive procedure. The procedure set forth in this section 24.02 is the
exclusive procedure for changing a taxpayer’s method of accounting from the mark-tomarket method described in § 475 to a realization method. Thus, filing the Notification
Statement described in section 24.02(6) of this revenue procedure is the exclusive
manner of revoking a § 475(e), (f)(1), or (f)(2) election. Moreover, any taxpayer
requesting permission to change to a realization method must follow the procedures
described in this section 24.02 and other applicable provisions of Rev. Proc. 2015-13,
2015-5 I.R.B. 419, to request consent to change its method of accounting for securities
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described in § 475(c)(2) (Section 475 Securities), commodities described in § 475(e)(2)
(Section 475 Commodities), or both.
(3) Applicability. This change applies to a taxpayer if all of the following
conditions in paragraphs (a) through (c) below are satisfied:
(a) the taxpayer is using, properly or improperly, the mark-to-market
method of accounting described in § 475;
(b) the taxpayer is requesting permission to change to a realization
method of accounting and report gains or losses from the disposition of Section 475
Securities, Section 475 Commodities, or both, under § 1001; and
(c) the taxpayer meets the requirements of this section 24.02, including
the requirement that it timely file the Notification Statement described in section
24.02(6) of this revenue procedure.
(4) Certain eligibility rule inapplicable. The eligibility rule in section 5.01(1)(d)
of Rev. Proc. 2015-13, 2015-5 I.R.B. 419, does not apply to this change.
(5) Manner of making change. This change is made using a cut-off basis
and applies only to Section 475 Securities, Section 475 Commodities, or both, that are
accounted for using the mark-to-market method of accounting described in § 475 and
for which a change in method is requested under this section 24.02. Accordingly, a
§ 481(a) adjustment is neither permitted nor required.
Under the cut-off basis, a taxpayer must make a final mark of all Section 475
Securities, Section 475 Commodities, or both, that are being marked to market and that
are the subject of the accounting method change being requested, on the last business
day of the year preceding the year of change. As a result of the final mark, gain or loss
attributable to those securities and commodities is also recognized on the last business
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day of the year preceding the year of change. In the case of any Section 475 Security
or Section 475 Commodity that a taxpayer holds on the first day of the year of change,
the taxpayer must make proper adjustment in the amount of any subsequently realized
gain or loss to take into account adjustments for the gain or loss recognized prior to the
first day of the year of change pursuant to the use of the mark-to-market method of
accounting described in § 475 in order to prevent amounts from being duplicated or
omitted. Any change in value on or after the first day of the year of change will be taken
into account using a realization method of accounting unless section 24.02(7) of this
revenue procedure permits the taxpayer to resume a mark-to-market method and the
taxpayer resumes a mark-to-market method.
(6) Notification Statement required. In addition to filing the Form 3115
required under section 6.03(1) of Rev. Proc. 2015-13, to change to a realization method
of accounting under this section 24.02, a taxpayer must also file a Notification
Statement that satisfies the requirements in section 24.02(6) of this revenue procedure.
The Notification Statement must be filed not later than the due date (without regard to
any extension) of the original federal income tax return for the taxable year immediately
preceding the year of change and must be attached either to that return or, if applicable,
to a request for an extension of time to file that return.
(a) Notification Statement contents. The Notification Statement must
contain (1) the name of the taxpayer that will change its method of accounting (that is,
the applicant), and, if applicable, the filer (for example, its parent corporation); (2) a
statement that the taxpayer is requesting to change its method of accounting from the
mark-to-market method of accounting described in § 475 to a realization method; (3) the
year of change (both the beginning and ending dates); and (4) the types of instruments
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subject to the method change, that is, Section 475 Securities, Section 475
Commodities, or both. If a taxpayer has made an election under § 475(e), (f)(1), or
(f)(2), the taxpayer must also include a statement revoking the taxpayer’s section 475
election or elections for the Section 475 Securities, Section 475 Commodities, or both,
for which a change in accounting method is sought.
(b) Effect of filing Notification Statement. Once the taxpayer files a
Notification Statement for the year of change, a realization method of accounting is the
only permissible method of accounting for Section 475 Securities, Section 475
Commodities, or both, described in the Notification Statement for the entire year of
change and all subsequent years (unless section 24.02(7)(a) of this revenue procedure
applies). A taxpayer that files the Notification Statement described in this section 24.02
but fails to change its method of accounting using the procedures described in Rev.
Proc. 2015-13 and this section 24.02 is using an impermissible method.
(c) Limited § 301.9100 relief. Section 301.9100 relief for failure to
comply with the requirements of this section 24.02(6) will be granted only in unusual
and compelling circumstances.
(7) Additional requirements.
(a) Resuming the mark-to-market method of accounting. A taxpayer may
not use the automatic change procedures in Rev. Proc. 2015-13 and section 24.01 of
this revenue procedure to resume using the mark-to-market method of accounting
described in § 475 for the Section 475 Securities, Section 475 Commodities, or both,
that are the subject of the method change being requested using this section 24.02
during any of the five taxable years beginning with the year of change. To resume
using the mark-to-market method of accounting described in § 475 during this 5-year
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period, a taxpayer must: (i) request the change using the non-automatic change
procedures in Rev. Proc. 2015-13, (ii) request the change by the date an election for the
year of change would be due under section 5.03 of Rev. Proc. 99-17, 1999-1 C.B. 503,
and (iii) include a statement that satisfies all applicable requirements of section 5.04 of
Rev. Proc. 99-17.
(b) Copy of Notification Statement. A taxpayer must attach a copy of the
Notification Statement required in section 24.02(6) of this revenue procedure to its Form
3115 filed under this section 24.02.
(c) No audit protection for valuation. A taxpayer does not receive audit
protection under section 8.01 of Rev. Proc. 2015-13 for the method of valuation used by
the taxpayer to determine the fair market value of the taxpayer’s Section 475 Securities,
Section 475 Commodities, or both, for a taxable year prior to the year of change, or for
a failure to comply with the requirements in Rev. Proc. 99-17 to properly elect the markto-market method. See section 8.02(2) of Rev. Proc. 2015-13.
(8) Designated automatic accounting method change number. The
designated automatic accounting method change number for a change under this
section 24.02 is “218”.
(9) Contact information. For further information regarding a change under
this section, contact Marsha Sabin at (202) 317-6945 (not a toll-free call).
