Can I elect Mark to Market accounting under section 475 for the year 2019 and still be able to e-file 2018 Tax Return? Or do I have to paper file 2018 tax return? Please note I was not a full-time trader or had any trading business in 2018. I am making this election for the first time and that too for year 2019.
The bottom line is that you would submit Form 8453 only with one of the forms listed on Form 8453 (the election is not one of them). The form you would submit with Form 8453 is Form 3115, but you would not submit that form prior to the making the election.
I suggest that you read through Rev. Proc. 2018-31 as it is authoritative.
See Page 94: https://www.irs.gov/pub/irs-drop/rp-18-31.pdf
Also, take a look at the following link for a quick summary of the procedure. Again, according to the instructions, the election must be made by attaching a statement to your 2018 return or to a request for an extension (Form 4868).
http://www.tradelogsoftware.com/resources/mark-to-market-form-4797/#mtm-how
@twistedether wrote:Can I elect Mark to Market accounting under section 475 for the year 2019 and still be able to e-file 2018 Tax Return? Or do I have to paper file 2018 tax return?
TurboTax does not support making the MTM election so you will have to paper file your 2018 return.
The link below is to a thread with relevant information for the MTM election procedure.
https://ttlc.intuit.com/questions/4735190-how-can-i-make-the-mtm-election-for-the-next-year
Thank you for your response. How about this? Why can't I just e file my entire 2018 tax return. Then separately simply mail the election using form 8453. Kinda like the situation here: https://ttlc.intuit.com/questions/4400974-i-have-already-filed-my-2017-return-but-want-to-make-a-mark-to-market-election-for-2018-can-we-amend-this-to-my-filed-2017-return
Is that okay to do?
The bottom line is that you would submit Form 8453 only with one of the forms listed on Form 8453 (the election is not one of them). The form you would submit with Form 8453 is Form 3115, but you would not submit that form prior to the making the election.
I suggest that you read through Rev. Proc. 2018-31 as it is authoritative.
See Page 94: https://www.irs.gov/pub/irs-drop/rp-18-31.pdf
Also, take a look at the following link for a quick summary of the procedure. Again, according to the instructions, the election must be made by attaching a statement to your 2018 return or to a request for an extension (Form 4868).
http://www.tradelogsoftware.com/resources/mark-to-market-form-4797/#mtm-how
Hi -
Thank you for your very informative email. Do you know whether TurboTax supports the MTM accounting method for trading after the MTM election is made? I made the election for the 2018 tax year outside of TurboTax but would like to return to TurboTax this year. Thank you for your help!