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Strategies & Market Trends : IRS, Tax related strategies--Traders
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To: Colin Cody who wrote (247)3/24/1998 8:50:00 AM
From: Robert A. Green, CPA  Read Replies (1) of 1383
 
Any gain or loss recognized by an electing taxpayer is ordinary gain or loss. (Com Rept, see 5111). - Per, RIA quote taken from their discussion of mark to market rules.

Offsetting realized capital gains with unrealized losses on Schedule D and taking trading expenses on Schedule C should be sufficient for most taxpayers.

I recall that Colin Cody pointed out that this mark to market election is not clear and that Congress did not intend to allow traders to be able to deduct trading losses in excess of the $3,000 per year limit on capital losses.

I don't think taxpayers should push the envelope on this issue until it is further clarified. If you take an excess unrealized trading loss on Schedule C and the result is an overpayment credit, I suggest you do not claim a refund but rather apply any overpayment credit to the following tax year's estimated taxes.
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