I elected mark-to-market this year for the first time and am trying to file taxes for the first time as a trader. Heading into this year, I had a long term position (from 2018) that I sold this year for a loss.
It was my understanding that on January 1st of the year you start M2M accounting, you take all securities at their present value for purposes of accounting. (i.e., if you elect M2M accounting and on January 1st, a long term holding XYZ is at $100, and you sell it in March for $60, there is a $40 M2M loss). I thought you had to take special steps to segregate long term holdings if you wanted long term capital gains treatment.
I would like to consider this loss as a M2M loss, but I was told that it is ineligible because it was long-term. Is that right?
