If I choose MTM for next year, do I need tax software?

Discussion in 'Taxes and Accounting' started by UVXY20, Nov 26, 2023.

  1. UVXY20

    UVXY20

    Seems easy enough to collect and compute on Excel. (Sole prop TTS trading futures, FX, equities, options running 3 accounts totalling about 500K.)
     
  2. tiddlywinks

    tiddlywinks

    I don't think you NEED tax software. BUT....
    I don't think it will be as easy as seem to think.

    With the plethora of instrument types you list, your cost basis will change for every holding spanning the year-end-new-year period (based on your fiscal year). Additionally, getting your initial cost basis may not be as straight-forward as you want, as you do not get a stepped up cost basis (gain or loss) on existing holdings "just because" you begin filing with MTM.

    Also, you should get a professional opinion for EACH of the instrument types you want to put under the umbrella... for instance, specifically stating MTM for futures (which is MTM by default) gives up part of section 1256 contracts tax advantage. And don't forget, once MTM is chosen, it can not be changed for 5 years... in any case, the IRS has to explicitly accept and revoke the change.

    Happy Holidays.
     
  3. newwurldmn

    newwurldmn

    No. You don’t need accounting software. You need an accountant.

    He will pay for himself easily.
     
    ajacobson likes this.
  4. Robert Morse

    Robert Morse Sponsor

    My Accountant always made me pay him! :D

     
    newwurldmn likes this.