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Returning Member

day trading tax

1.does TurboTax automatically calculate day trading taxes? (with wash sales)

(i missed market to market enrollment for 2020.)
2.is there a way to late enrollment for market to market for 2020 ?

 

1 Best answer

Accepted Solutions
tagteam
Level 15

day trading tax

A trader must make the mark-to-market election by the original due date (not including extensions) of the tax return for the year prior to the year for which the election becomes effective.

 

See https://www.journalofaccountancy.com/issues/2014/jul/sec-475-election-20149537.html


See also https://www.irs.gov/taxtopics/tc429

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5 Replies
tagteam
Level 15

day trading tax

A trader must make the mark-to-market election by the original due date (not including extensions) of the tax return for the year prior to the year for which the election becomes effective.

 

See https://www.journalofaccountancy.com/issues/2014/jul/sec-475-election-20149537.html


See also https://www.irs.gov/taxtopics/tc429

View solution in original post

Learn
Returning Member

day trading tax

does turbotax calculate daytrading taxes with wash sales automatically ?

if so which version does it ?

Mike9241
Level 6

day trading tax

to late to make M-T=-M election for 2020 had to be done with timely filed (by 7/15/2020) 2019 return.

using the M-T-M election there are no wash sales since the securities held a t year end are repriced to market value.  before deciding to make the 475(f) election you should sit down with a pro to determine if it' produces lower taxes and whether you qualify. just because you do day trading doesn't mean you would meet the IRS criteria. 

fanfare
Level 15

day trading tax

TurboTax won't do any wash sale calculations.

---

As an active investor, be aware that your category Box A sales without adjustments do not require Form 8949, so there is no reason to import or key in those transactions.
Instead use the "enter a summary" option to put your numbers on Schedule D Line 1a.
--
If you have wash sales, it gets more complicated since those adjusted transactions have to be itemized on Form 8949 and the summary totals adjusted accordingly.

Enter the wash sales on Form 8949, then use the subtotal results on the bottom of that form to know how much to subtract. Be sure to NOT check the adjustments box in the summary window.
--
Alternatively, if entry of Wash Sales is too tedious,
summarize and check the box for adjustments and enter the disallowed amount.
This summary will go on Schedule D Line 1b.
You will be making the mail-in election.

fanfare
Level 15

day trading tax

Note that as a Professional Trader, the wash sale rule does not apply, but you do have to itemize every trade you make, on an attachment to Form 4797.

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