@Critter-3Thank you so much for every reply you have given. You definitely deserve best answer, for helping me greatly.
"Please read up on this situation thoroughly before taking this step. https://www.thetaxadviser.com/issues/2010/feb/sec475mark-to-marketelection.html"
I actually read that article and it was one of the ones that brought me here. As it made it sound like I could still claim the election for this tax year (tax year 2021), when I file my taxes in Feb or March of next year. Then I went over to the IRS section of it and it said that was not true. Which confused me, because this election seems to be one of the few that actually needs to be claimed in a Prior year's tax return for the current tax year. Which seems to me to be like Fortune Telling, like how many other traders do not know if they are going to take up trading. Like how many of us are exactly at the same place in life when we first started the year. Add into that traders need to show actual trading first, then it seems to be a no-win situation.
Now that article did tell me that essentially if I am accepted for Mark to Market election, my trading basically becomes a business. Which is okay, for a few years I ran a small eBay shop and had to handle my taxes from that, but I had to stop due to medical issues. However, the key difference there is that I got taxed on my actual gain and not on non-existent gains, which is the issue that seems to cause all the confusion. Like if you don't make a million or 100k, how can you get taxed on it? That seems to be the issue that causes the problem.
"Basically .... when you take the MARK TO MARKET election then all your positions are considered "sold" at the end of the year and all gains & losses are computed and reported on the return without limitation to the loss limitation rules as ordinary income not capital gains or losses."
But without the Mark to Market Election, since from everything I read elsewhere and seen here, if I am accepted for it, the election would not actually take affect until next tax year. Which means this year in order to book any real losses and get those losses deducted from my gains, I just need to stop trading in November or October?
Basically, I am trying to understand that the Wash Sale rule does not some how make losses magically disappear. Like if I took a loss on a stock and want to book that loss, I just need to stop trading in October or November and then everything is good to go. My losses become realized and my actual gain (currently 12K) is the only gain I have to worry about the IRS taxing me on.
