There are two aspects to this. You can be a trader without the Mark to Market election. You have to still meet all the qualifications to be treated as a business to claim Schedule C expenses. You will have no SE income. Your gains and losses are still entered on Schedule D.
To be engaged in business as a trader in securities, you must meet all of the following conditions:
- You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation;
- Your activity must be substantial; and
- You must carry on the activity with continuity and regularity.
If you choose to take the Mark to Market election, you will enter your gains and losses on Form 4797. Your losses are not restricted.
In either case, investments you hold long-term are as an investor, not a trader.
