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

To: Kaye Thomas who wrote (537)	11/1/1998 7:58:00 AM
From: Tom Lane	Read Replies (1) \| Respond to of 1383

Day trader wash sales Let's assume I'm a pure day trader, meaning 1) I never have overnight positions; 2) all of my gains and losses are short-term; 3) I'm a trader, not an investor; 4) I have little or no other income (in particular, no long-term capital gains); 5) it would be very painful to track wash sales. Can I avoid the wash sale rule by electing to mark-to-market? Since I never have unrealized gains or losses, I wouldn't actually mark anything to market, so my net gain or loss wouldn't change. My short-term capital gain would be converted to ordinary income, but this income would not be subject to self-employment tax. The only disadvantage I can think of would be if I had a large carryover capital loss, since I could only deduct $3000 of this loss per year against what would now be ordinary income. Or am I missing something? I'd be curious to know what most day traders do about wash sales. I can't believe someone with thousands of trades a year actually tracks wash sales. Nor do I imagine they take 30 days off at the end of every year.