I am an option trader currently trying to use the mark to market election under section 475(f). I just recently change my accounting method to mark to market with my brokerage in September 2023.
1. I was wondering if I can still be able to use 475(f) to get the loss from my trading starting from January 2023 to September 2023?
2. I was wondering as an individual day trader can I use mark to market election on my 1040 return.
3. Do we have to ask the brokerage to change to mark to market accounting in order to be qualified for this 475(f) election?
did you file an application to use 475(f) with your unextended return or extension for 2022?
if you made a valid election, you use MTM for the whole year
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. You can make the election by attaching a statement either to your income tax return if filed without an extension or to a request for an extension of time to file your return. The statement should include the following information:
That you're making an election under section 475(f);
The first tax year for which the election is effective (that is, the tax year for which a timely election is being made); and
The trade or business for which you're making the election.
Refer to the Instructions for Schedule D for more information on how to make the mark-to-market election. It's important to note that in general, late section 475(f) elections aren't allowed. After making the election to change to the mark-to-market method of accounting, you must change your method of accounting for securities under Revenue Procedure 2022-14, Section 24.01.
In addition to making the election, you'll also be required to file a Form 3115, Application for Change in Accounting Method. Publication 550 describes the procedures for making an election under the section called "Special Rules for Traders in Securities." Non-filing of the Form 3115 mentioned above won't invalidate a timely and valid election.
Thank you for your answer.
I did not file any application to use the 475(f) on 4/15/2023 on my 2022 tax return.
Is there a way that I can amend this and how can I use it for this 2023 tax return? Do I still have time to submit application to use 475(f) ?
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