IRS, Tax related strategies--Traders Message Board

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

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To: Nandu who wrote (749)	3/6/1999 8:56:00 PM
From: Colin Cody	Read Replies (1) of 1383

Nandu, my post that you disagree with was about this Thus, as a conclusion: the MTM election can be of value to a successful trader. It can be to his advantage to sell and re-buy his under-the-water stocks at perceived lows. Actually, I don't really see that you were arguing against what I said. The example that Tom posted was a little hard for me to follow, as it did seem to use "paper profits", "accounting realized profits" and "tax recognized profits" somewhat interchangeably, and so I did not comment on that at all. I went to his ending conclusions (as stated above) and agreed with that. It is also true, as you say, that if somehow a TRADER held a few trading positions for over a year (or perhaps he died and his executors sold off his positions) that the gains would be denied L-T rates on those sales. (Conversely, and losses would not be subject to the capital loss limitations) Of course my two examples above and extremely RARE. And keep in mind that even a trader using MTM accounting MAY ELECT to treat certain stock purchases as long-term investments and as such THOSE stocks would be subject to the lower L-T rates. Colin

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