From the FAQ: Without the election, gains and losses are recognized when the security is sold. They are treated and taxed as capital gains and losses and are subject to capital gains tax rates, as well as the limitation of losses and the wash sale rules.
With the election, gains and losses are based on the value of your holdings at year-end. It's treated and taxed as ordinary income. The limit on losses and the wash sale rules don't apply.
Instructions for entering your trades with or without the election is included in the FAQ. @mccooney
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