I've been filing electronically for several years now, but this year I want to elect mark-to-market for 2006. Can this be done electronically at the same time I file my regular return? Perhaps sent in separately following my electronic filing? Or, do I need to just mail everything the old fashion way?

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Traders' Consortium

This is a good reference to MTM accounting:
http://www.greencompany.com/EducationCenter/GTTRecMTMAccounting.shtml

All forms ,Schedules,Publications,FAQs/info topics
Save lot of time in research
http://www.edaytradertax.com/forms_links.htm

Addendum

I want to do Market to Market filling this year, but I have not register my business as a Stock Market Trader in 2005, my all trades are short term will I still qualify to market to market even I dont register as a trader? I know what a market to market is about, but I dont know if I have to get register as a trader to fill out market to market .I will have a meeting with IRS support in local state and I want to know what question I can ask later...

Edited by Moderator on 2/24/6 to include addendum

Thanks. I'm working on this still... Call into the IRS... Will be on hold forever. I don't think you can file the election electronically, but I thought if there was a way, Equis users would know.

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Traders' Consortium

Well... as far as I know, it cannot be done electronically. Furthermore, qualifying for mark-to-market is no easy task. You first have to qualify for trader tax status. Record keeping is critical. It has little to do with how many trades you make, but is loosely related to the time the trades are held, among several other factors. I would recommend contacting a trader tax specialist... even my long time accountant recommended the same thing. It's easy to submit what you think is correct and wind up getting audited and paying penalties and interest. IMO, it's just not worth it. A professional review and preparation of your taxes, with good existing system of accounting, will cost somewhere in the neighborhood of $1,500. For what it’s worth- I’m not selling the issue- I’m told that you are probably less likely to be audited as a trader if your taxes are filed after the due date (with proper extension).

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Traders' Consortium

Dear Private:

I would hire a CPA who specializes in taxes. Seeking advice directly from the IRS is just that... advice. It will not protect you; that meeting will not support you in an audit. My information is from an IRS tax agent... the recommendation to seek out a competent CPA. Trader tax status will be applied to you (or not) as an individual. It has nothing to do with whether or not you trade as part of a company. We are talking about individual tax obligations, not corporate tax obligations. If you aren't happy with the cost of such services then shop around. Whatever the cost, you will have someone that should be able to represent you in the event of an audit. Such a CPA should work intimately with a tax attorney. Do your homework. As I said earlier, making a mistake could be very costly. You'll be subject to audit on this return for years to come... ignorance of the law is no excuse.

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Traders' Consortium

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Traders' Consortium