Mark-to-Market Accounting for Stock Trading Accounts

[filipec]

1. Mark-to-Market Accounting for Stock Investment Accounts:

   • When electing mark-to-market accounting, will this change be effective for all of my stock investment accounts, or is it possible to selectively apply MTM to a trading account while keeping a separate investment account without MTM accounting?

2. Transferability of MTM Election to a Newly Created LLC:

   • Once MTM is elected in my personal name, is it permissible to transfer this election to a newly created Limited Liability Company (LLC)? If so, what are the implications and procedures for such a transfer?

3. Optimal Approach: Personal vs. LLC Election for MTM:

   • Would it be more advantageous to open an LLC and elect MTM solely for the LLC, considering potential tax benefits or other advantages compared to a personal MTM election?

4. Using Personal Trading History for TTS Qualification under an LLC:

   • Assuming operation under the newly opened LLC, if I elect MTM, can I leverage my personal trading history to qualify for Trader Tax Status (TTS) and subsequently be eligible to elect MTM for the LLC?

[Anonymous_]

You might want to read through the article at the link below. Note that you should be able to segregate your trading account from a non-trading account and, further, you will most likely gain little by organizing an LLC as a single-member LLC is disregarded for federal income tax purposes (although you could use an LLC to segregate your MTM trading activity).

https://www.thetaxadviser.com/issues/2010/feb/sec475mark-to-marketelection.html