The first year after I made the section 475(f) M2M trader election, I had a professional prepare my tax return in order to learn how to apply this rule properly. He told me that Massachusetts doesn't recognize the M2M election, and that trading gains and losses must be reported as short term capital gains and losses. However, a Massachusetts tax auditor I spoke with last year told me that the MA tax code was last linked to the Federal tax code in 2005, so if the Federl M2M election rule was enacted before that (which it was), then it should apply in Massachusetts as well. He didn't give me any specific info since it was peripheral to the subject we were addressing, and I've been having trouble finding any definitive information about whether this is the case, and if so, how to report it, since as far as I can tell there is no Massachusetts equivalent of from 4797.
If I have trader status and had a NOL, can I use that to offset other income on a Massachusetts tax return? If so, how do I report it?
If the law on this has changed recently, I'd also like to know about 2015, 2016, and 2017, since refunds for those years can still be claimed.
the federal code considers a professional trader activity as a business, even though you don't have any inventory or customers.
If MA is aligned ( how could it not be ? ), your state return should be consistent.