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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: WallStBum who wrote (430)	7/17/1998 8:24:00 PM
From: Colin Cody	Read Replies (1) \| Respond to of 1383

But seriously, is it because a trader would only have s-t gains that are ordinary anyways? Short-term capital gains are SIMILAR to Ordinary gains and ordinary income. They generally are taxed at the same high rate. . An example of a difference: you incurred a $50,000 trading loss in 1996, and a $3,000 trading loss in 1997. So you'd then have $47,000 carrying forward to 1998. In 1998 you lose $5,000 and elect the MTM rule thinking you'll get a $5,000 w/o and not a $3,000 one, and ditto in future years. . In 1999 and future years you improve and average $30,000 profits per year. . In this example you would need to wait 15 years to use up your capital loss carry forward, whereas WITHOUT a MTM election you would have used the carryforward up in two years! . Bottom line is it takes unique personal PLANNING. This is not a one-size fits all election, IMO. . Colin