Yes, your entire loss will carryover to future years. Because you are in the business of trading securities, your losses from your business will be qualified business losses (QBI) and will carryover to future years. Any gains in 2022 can be offset with your QBI losses from the prior year.
As a trader who has made a timely mark-to-market election (Section 475), your gains and losses from sales of securities are treated as ordinary gains and losses (except for securities held for investment). These gains and losses must be reported on Part II of Form 4797, Sales of Business Property.
Given that you have made the election under Section 475, TurboTax recommends that you use the CD/downloadable version of TurboTax because some entries may need to be entered directly in Forms Mode when completing Form 4797. Here are the steps to follow if you use (highly recommended) TurboTax CD/download.
How to enter sale of business property for traders with MTM election:
1. Using your CD or downloaded version of TurboTax, open or continue to your return.
2. Under the Business Items section select Start or Update beside Sale of Business Property.
3. Select Sales of business or rental property that you haven’t already reported.
4. Select Yes or No to question Do all of the following apply to the property you sold?
5. Enter the details of the sale.
6. On the page Tell Us About Your Sale, select the Type of sale (To report on Form 4797 in Section II, select Held one year or less).
7. Enter the amount reported on Form 1099-B on the next input screen.
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