IRS, Tax related strategies--Traders Message Board

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Strategies & Market Trends : IRS, Tax related strategies--Traders

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To: WallStBum who wrote (428)	7/17/1998 12:10:00 PM
From: Colin Cody	Read Replies (1) of 1383

WSB, If you were always FLAT on December 31st then generally the election wouldn't have much effect on you if you were profitable every year, and it COULD recognize significantly more losses (which may or may not be desirable) if you were not profitable for any particular year. . If you carry positions over-night then the election would eliminate most all potential for TIMING your income. i.e. if you were carrying over 1,000 shares of YHOO with a 12/31/9X close of $200, but your COST basis of this TRADER position was say $100, you'd be paying taxes on an extra $100,000 this year, rather than deferring it to a future year. . Conversely, if your TRADER position in YHOO cost you $200 but was only worth $100 on 12/31/9X you could be recognizing an extra $100,000 loss rather than waiting until a future year. . The "automatic" MTM election is a permanent one. i.e. it is NOT "automatic" to elect out of MTM. There can be definite benefits to making the election, but you should be certain of what you are doing before making it. . Colin

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