Do M2M Traders have to list all trades on form 4797?

Discussion in 'Taxes and Accounting' started by listedguru, May 11, 2020.

  1. hafez50

    hafez50


    No its one line accounting .As someone said the Irs only cares about the taxable profit or loss. I used Green back in the late 90's for a few yrs and then moved to another accountant 1/3 his price . The key is the footnotes that explain what your doing and your an mtm 4797 mtm trader and your not subject to ss taxes etc. You spend most of your time trading trying to capture daily moves etc
     
    #11     May 11, 2020
  2. o

    When you told me how much you paid Robert Green I thought "Wow, this guy got a really good deal". Not to complain because Green created two hybrid 401k accounts, allowed me to buy a SUV(Over 6000 lbs) while having the IRS and State pay a large percent plus plus he moved money so my Social Security was maxed(in 2005 it was $209k?) without increasing my tax burden. You answered the Ops question well, not really sure what I can add to this thread.
     
    #12     May 11, 2020
  3. So the IRS hasn't ever inquired about not reporting every single trade? I just worry about them questioning why all the trades arn't being listed. It sounds like maybe the accountants agree that trade reporting isn't a requirement?
     
    #13     May 11, 2020
  4. hafez50

    hafez50

    No its one line accounting .As someone said the Irs only cares about the taxable profit or loss I used Green back in the late 90's for a few yrs and then moved to another accountant 1/3 his price . The key is the the footnotes that explain what your doing and your an mtm 4797 mtm trader and your not subject to ss taxes etc. You spend most of your time trading trying to capture daily moves etc

    Never once in 20 plus yrs . I have several friends who do also . I used to have 7000 page 1099's with $5 billion of trades . Some days i'd have 2500-3000 trades . UPS would deliver in big boxes in the old days .
     
    #14     May 11, 2020
  5. FB2020

    FB2020

    OP - I believe you can just manually attach a statement similar to what 4797 has. Most brokers should provide that already. They should really only care about totals.
    Yes, foot notes etc. would be good to add.

    Also, since you guys seem to be familiar with MTM, could someone please respond my post from a few days ago. I wanted to understand the MTM tax filing process. I will be choosing MTM for the first time in 2020 (for filing in 2021).
    I would really appreciate someone responds, so I could understand the process. I have a few steps clear, but wanted to get full picture. Had quite a lot of loss in 2020, so want to utilize MTM.

    here's the link to it:
    https://www.elitetrader.com/et/threads/steps-to-file-section-475-mtm.344451/

    Thanks
     
    #15     May 11, 2020
  6. You need to talk to Green or another firm about the deadline to change your accounting status to MTM. The IRS use to fight traders who they claimed "have not raised their trading to a level of a business" or wanted to use a carry-back instead of forward. Things use to be harder for home traders. I hope the IRS has become a lot more accommodating because they were audit happy twenty years ago.
     
    #16     May 12, 2020
  7. FB2020

    FB2020

    I believe Green's website says that MTM election date is now extended too.
    Quoting from that site: https://greentradertax.com/april-15-tax-deadline-moved-to-july-15/


    April 9: IRS Notice 2020-23, dated April 9, states on page 7: “Finally, elections that are made or required to be made on a timely filed Specified Form (or attachment to a Specified Form) shall be timely made if filed on such Specified Form or attachment, as appropriate, on or before July 15, 2020.”

    Good news: TTS traders as sole proprietor individuals now have to July 15, 2020, to elect Section 475(f) for 2020, as the 475 MTM election is an attachment to a specified form, either F1040 or F4868.
     
    #17     May 12, 2020
  8. hafez50

    hafez50

    The rule as i recall to qualifying for mtm trading status which allows you to write off all your expenses is " You spend a substantial portion of your time trading trying to capture daily movements in the mkt" . You must be an active trader and it must be take up a substantial portion of your time . I'm sure if your a w-2 computer programer and file a sch c mtm tax return the irs could easily deny it.
     
    #18     May 12, 2020
  9. R1234

    R1234

    You mentioned Schedule C. Is your trading entity an LLC?

    My trading entity is a husband/wife partnership that needs to file a K1. Down the road I really want to simplify things and just have an LLC where I could potentially do the returns myself.
     
    #19     May 12, 2020
  10. R1234

    R1234

    Over the years I've used 3 different CPA for MTM accounting (first one was Green). They've all requested a full trade list such as 4797.
     
    #20     May 12, 2020