I have significant wash sale losses from stocks I daytraded. I want to invest in these stocks for over a year since I think they are cheap. Can mark to market be active if I do both: invest for over a year in certain stocks while daytrading other stocks in the same account?
I am not a credentialed tax advisor... For retail, TTS is REQUIRED for an MTM election to be made. Stated differently, TTS is required before an MTM election would be acceptable to the IRS. TTS, as far the IRS is concerned, is based on a combination of quantitative metrics and qualitative facts and circumstances. Two such quantitative metrics are 1) 720 trades (each side is considered a trade) per year (prorated for portion of year). 2) Holding period of 31 days or less. As you can see, if nothing else, the holding period would cause an insurmountable problem for TTS qualification for your long-term holding scenario. That said, Investment Management businesses and/or hedge fund businesses very likely qualify for MTM based on the nature of the business itself, with no TTS qualification needed or even possible. For retail, day trading and investment should be segregated. Plus, retirement accounts and non-taxable accounts can not be used for TTS qualification. HTH
Thank you, but is it average holding period of 31 days from what I read? Because I can lower my average with my 200 daytrades a day that I currently do on penny stocks while holding the other blue chip stocks longterm
One such qualitative is... A taxpayer must seek to catch swings in daily market movements and profit from these short-term changes rather than profiting from long-term holding of investments.