Day Trading taxes

[fanfare]

If you read carefully, the revocation is effective for 2022, if attached to your 2021 tax return or Form 4868.

[t_a_nguyen]

". . .

 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.

. . ."

CAN Turbo Tax help with this feature so day trader just select the OPTION, and fill out the information needed 1 year ahead, then the following years, just buy Turbo Tax to CONTINUE !

[t_a_nguyen]

". . .

Please note that you will want the TurboTax desktop software to correctly do this; the TurboTax online program will not be adequate, because you will not have access to the "Forms Mode" of the software.

. . ."

Can Turbo Tax Premier Plus add this feature, i.e., help to file M-2-M one year earlier, and with the FORMS !

Users can PAY MORE to Turbo Tax in the FUTURE.

[t_a_nguyen]

". . .

But until TurboTax allows attachment of TTS transaction detail with e-File, you'll have to file a paper return.

. . ."

PLEASE, Turbo Tax  HELP to make it HAPPENS !

[allednam]

Hello,

Looking for any advice per not having Elected in May 2021 to be considered as a Day Trader for tax

year 2021. Just plainly forgot!

[tagteam]

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@allednam wrote:

Looking for any advice per not having Elected in May 2021 to be considered as a Day Trader for tax

year 2021. Just plainly forgot!

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This will not even be cold comfort, unfortunately.

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 Topic No. 429 Traders in Securities (Information for Form 1040 or 1040-SR Filers) | Internal Revenue...

On the off chance that you are referring merely to "trader status", you do not need to make an election for that.

[allednam]

Tagteam,

Appreciate the quick response & recognize that I was to have filed the MTM election by May 2021. However, I did not. My Etrade records should be enough to show no nefarious reason for not qualifying and obviously would need to file for this MTM election.

That said, apart from just being straight forward with the IRS, speaking to an attorney &/or an accountant with more than basic familiarity on how best to approach the problem at this late stage -  Any suggestions on what or what not to do per dealing with the IRS or other? 

With thx in advance...

[tagteam]

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@allednam wrote:

My Etrade records should be enough to show no nefarious reason for not qualifying and obviously would need to file for this MTM election.

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It does not matter what your records show, you are supposed to file the MTM 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.

Since you did not file the election, under Section 475(f), you have to treat gains and losses from sales of securities as capital gains and losses and report them on Schedule D.

[Mike9241]

@tagteam is correct. see an attorney but they will tell you the same thing. there is no provision in the code, regulations, or other authoritative literature for late filing the election. the earliest you can validly elect is for the tax year 2022 and the election must (as of now) be filed by 4/15/2022 - either with a timely filed return (can't be e-filed) or attached to a timely filed extension for the 2021 tax year

[Buybuy]

I am ready to go with manual selection of Form 4797.

I still need to send the all individual trade transactions details which are in Form 8949.

Can I generate Form 8949 in Turbotax without auto-generating Schedule D?

If I can not do that, then I would need to send the Form 8949 details separately by mail after efile.

[tagteam]

You do not use Form 4797 unless you have made a Mark-to-Market Election.

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

[Buybuy]

Yes, and I have done all what is needed with 475 MTM selection last year on time. 

Just want to know how to generate individual transaction details in 8949 without triggering Schedule D which I dont need to use as I am using 4797.

[Buybuy]

What I mean to say is that my question is not on who qualifies for MTM TTS and who doesnt and how you need to select that before end of tax filing last year. I have taken care of all of that and did CPA consults going through my trading activities and got clear answer that I qualify. So those steps were taken early last year. And I do not have any questions on my status. That ship sailed last year.

My question is now in terms of using TurboTax on how to execute. If I use one liner in 4797 with total of gains and losses I still need to send to IRS the details of each transaction in 8949. But when I want to import all 1099Bs to create 8949, then it will create Schedule D which I do not need now as its all going into 4797.  So either I have to manually send 8949 after efiling (which I want to avoid) or there is a way to generate 8949 from the 4 brokers I have without triggering Schedule D being auto-generated by TurboTax as would be the case for most filers who trade for investing. How do I do that?

[tagteam]

See https://www.irs.gov/instructions/i4797#en_US_2021_publink13087td0e1984

Where to report your gains and losses.

Attach to your tax return a statement, using the same format as line 10, showing the details of each transaction. Separately show and identify securities or commodities held and marked to market at the end of the year. On line 10, enter “Trader—see attached” in column (a) and the totals from the statement in columns (d), (f), and (g). Also, see the instructions for line 1, earlier.

[tagteam]

Form 8949 is used to report the sale and disposition of capital assets.