Mark-to-Market Election - form 3115 - Help

[pr0]

Hello,

Any advice on how to fill form 3115 for trading activities? It has some questions that not important to trading activities as it's applicable for other kinds of business outside of trading so I wanted to make sure I answer the form correctly.

A few questions I ran into:

1. Are there any pitfalls that I need to know of when filling out the form - such as selecting Yes or No somewhere of the area is ambiguous or vague etc.

2. What do I fill in "Tax year of change ends (MM/DD/YYYY)" - I thought I need to make this election once so I figured not to put a date here but reading online, I understand that this may need to be filled out.  And if so, if I select 1/1/2025 - 12/31/2025, do I need to resubmit this form next year?

3. Is there any impact to my 2024 taxes and 1099 or it's forward looking only? - I thought it is but wanted to confirm since there are questions about if I bring any transactions from prior years (which I don't want to do)

[PatriciaV]

1) As long as you follow the IRS Instructions for Form 3115, you should be able to answer all related questions correctly.

2) The tax year of change is the year when you intend to first apply the mark-to-market election. If you are filing Form 3115 to use on your tax year 2024 return, enter 12/31/2024 as the ending date. You can submit the form at any time. Your entries determine which tax returns are affected by the election.

3) The change affects the tax return for the year you choose and all subsequent returns. You don't need to file Form 3115 again unless you change your valuation method in the future.

[Mike9241]

are you making the 475(f) Mark-to-Market election?

generally the IRS requires you to file the election by the original due date (ie 4/15 - either with return or timely filed extension) with the return/extension for the year before the election is to take effect.   

If you are a new taxpayer and not required to file a 2024 income tax return, you make the election for 2024 by placing the above statement in your books and records no later than March 15, 2025. Attach a copy of the statement to your 2024 return.

If your method of accounting for 2024 or later year is inconsistent with the mark-to-market election, you must change your method of accounting for securities under Revenue Proce-dure 2023-24 (or its successor), available at IRS.gov/irb/2023-28_IRB#REV-PROC-2023-24. Revenue Procedure 2023-24 requires you to file Form 3115, Application for Change in Accounting Method. Follow its instructions. Enter “64” on line 1a of the Form 3115.