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To: Robert A. Green, CPA who wrote (3389)	3/13/1998 12:37:00 PM
From: Tom_	Read Replies (1) \| Respond to of 12617

Bravo! Thanks. I assume that the quote in your post relating to mark-to-market elections: "Any gain or loss recognized by an electing taxpayer is ordinary gain or loss. Com Rept, see 5111)" is RIA commentary and not Code. I'm not from Missouri, but could you possibly cite the committee report verbiage that this commentary relies on? I only ask because I'm confused. In TCLAUDES post, (#3384), the CCH cites indicate, over and over, that traders' gains and losses, (including I assume mark-to-market elections), result in capital gains or losses. Any help would be greatly appreciated. In any case thanks for your wonderful post. Confused in California.

To: Robert A. Green, CPA who wrote (3389)	3/13/1998 1:53:00 PM
From: Colin Cody	Respond to of 12617

Re: "A trader's "realized" gains and losses are capital, but properly elected year end mark to market gains and losses are "ordinary." Therefore, the $3,000 capital loss limitation remains in effect for a trader's realized losses, but it can be exceeded in an unlimited amount for a trader's year end marked to market ordinary losses. RIA tax research (CD-ROM) searched "trader" under 1997 Tax Law. " . I alluded to this issue last month on a Trader Thread here on S.I.. It is a highly complex and misunderstood issue within the new 475(f) election. . At the time I didn't delve into it in any kind of detail, as it wasn't appropriate for the level the discussion was taking presently. . I'll expand a little on it today... (even though I KNOW this is really going to go over most people's head - but it will give you the FLAVOR of one issue that is unresolved presently) . I had a discussion earlier with a party responsible for drafting the original 475(f) Code section, via the House Reports, and who is ultimately responsible for the current technical corrections act and likely any future technical corrections regarding same. . I brought this very issue (above) to the attention of the IRS, and we did discuss in some detail as I believe that Congress was "clueless" and it seemed even the drafters had overlooked certain aspects of the issue. They SEEMED very interested in my observations, anyway. . Bottom line was this is NOT 100% clear (to me) from the Law as passed. Also it was NOT addressed/clarified in the already drafted technical corrections bill passed by the House at the time of my discussions with the IRS, AND I didn't get the impression they would be able to address (add) the issue in that bill AT THIS TIME, because the house already passed a bill without this information contained therein. . UNOFFICIAL: The GIST of my conversation was that CONGRESS'S INTENT was NOT as purported by RIA above. I presented MY analysis to the IRS and told them that MY CONCLUSION was, in effect, exactly as stated above, . BUT I wanted to discuss it because "I couldn't believe that congress INTENDED this to be the result" . I mention that, because I was pushing "my agenda" so-to-speak and the IRS drafter may have not wished to appear "confrontational", rather he may have agreed about my feeling of Congress's INTENT to just hear what I had to say. . All we ended this with was that the IRS will CONSIDER addressing this very issue along with several highly technical issues that I discussed with them IN SOME FUTURE technical corrections bill. . Until then "we're on our own" (g) . Colin