The following does not represent advice and must be verified through independent means:
To all who are considering trading as a "business" in 2009: If you have not yet requested "Mark To Market" status from the Internal Revenue Service, your deadline to do so is fast approaching! April 15th is the deadline and the election for the Mark to Market status can be filed with your 2008 tax return. If you file for an extension, send the "M to M" election notice with your extension. While I have not investigated the details of the process yet, it is my understanding that the notification is simply a written statement which must contain a few specific things. It was pointed out to me that acceptance by the IRS of this status is reliant on certain behaviors of the trader, not on the simple act of making the statement.
Among other things, Mark to Market relieves you of the burden of the "Wash Sale Rule" as well as allowing greater recognition of stock losses in the year they accrue; no requirement to carry-over losses to later years. It is also my understanding that the "M to M" election allows relief from self-employment tax in some way. I realized that I must investigate further the details of Mark to Market after getting an overview from the IRS agent with whom I spoke over the phone yesterday. He recommended reading IRS publication 550, page 72 in particular.
While I am still sketchy on the details, of one thing I am certain. The deadline is April 15th.
I will update this post when I get new information. Green Trader Tax is also a resource if you are willing to spend some money. See their website at www.greencompany.com/index.shtml.
The IRS may be contacted at 800-829-4933, call them to verify the statements I made above. Do not rely on me as an authority on the subject.
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