topic Re: stocks bought from an MTM account and then transferred to a non-MTM account, have unrealized profit/loss risk? in Investors & landlords

stocks bought from an MTM account and then transferred to a non-MTM account, have unrealized profit/loss risk?

Anonymous — Wed, 11 Feb 2026 10:37:13 GMT

I have two brokerage accounts (not retirement accounts) in my broker. The first one is marked as the Mark To Market account, wash sale is turned off. I am a day trader and trade daily. I only trade stocks, no options, and others. I also bought some NVDA stocks there and want to keep them longer. Then I created another one and moved them to the second account. The second account is used as a non-day-trade stock trading account, which is NOT an MTM account.

This is my first year to be a Mark To Market account owner. I am thinking of the year-end tax return. I know there is one 1099-B Form for each brokerage account. I will clear out all the stocks in the MTM account at the year-end. I want to know how these NVDA stocks will be treated in the 1099-B Form. Will they be reported on both 1099-B Forms or only in one of the forms? They are bought in a MTM account (recorded), and then they are transferred to a non-MTM account. There are no selling records for them. Are they still treated as part of the MTM account? My final goal is to avoid unrealized profit/loss in the MTM account, i.e. there is no unrealized profit/loss on the 1099-B for the MTM account. Please advise me on how to get there. I can move them back and sell them if necessary.

One more question here:

For 1099-B boxes 9 and 10, only the MTM account may have a number in them. For non-MTM account, they are always empty or 0. I am right?

Re: stocks bought from an MTM account and then transferred to a non-MTM account, have unrealized profit/loss risk?

fanfare — Fri, 29 Nov 2024 21:42:17 GMT

That move violates the proscription that you maintain your trading account separately from your investment account.

It looks like a tax avoidance scheme that the IRS would not appreciate.

Re: stocks bought from an MTM account and then transferred to a non-MTM account, have unrealized profit/loss risk?

Mike9241 — Sat, 30 Nov 2024 04:08:30 GMT

check with your broker, they may treat the movement of the securities as a sale at market value in the MTM account that would then become the cost basis in the trading account and likely the holding period would start anew.

if this is done it would be the equivalent of selling them in the MTM account and then buying them in the trading account which is permissible.

be careful, the rule for traders regarding investment securities

The securities held for investment must be identified as such in the trader's records on the day he or she acquires them (for example, by holding them in a separate brokerage account).

by the way the conditions to be treated as a trader are:

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.
The following facts and circumstances should be considered in determining if your activity is a securities trading business:
Typical holding periods for securities bought and sold;
The frequency and dollar amount of your trades during the year;
The extent to which you pursue the activity to produce income for a livelihood; and
The amount of time you devote to the activity.
If the nature of your trading activities doesn't qualify as a business, you're considered an investor.

if you don't meet these conditions the IRS would classify you as an investor meaning your MTM election is invalid.

Re: stocks bought from an MTM account and then transferred to a non-MTM account, have unrealized profit/loss risk?

fanfare — Sat, 30 Nov 2024 19:46:28 GMT

I don't think the broker knows your trading account is MTM.