Did you make a proper 475(f) election? A trader is not required to make this election. If you didn't then long-term, short-term holding and wash sale rules still apply.
If you did the following applies
Section 1256 contracts
■ 475(f)(1) - Securities are defined in 475(c)(2)
– Flush language states that “security” shall not include any contract to which section
1256(a) applies.
– Therefore, 1256 contracts are generally not a security within 475(c)(2) and thus outside
the scope of 475(f)(1) election.
Other securities when the 475(f) election is made
A trader must keep detailed records to distinguish the securities held for investment from the securities in the trading business. The securities held for investment must be identified as such in the trader's records on the day he or she acquires them (for example, by holding them in a separate brokerage account). This allows long-term capital gain on securities so designated.
