Let's start a tax discussion

Discussion in 'Trading' started by TheFinn, Mar 13, 2001.

  1. mjt



    What is the difference between filing as a trader and filing MTM? I always thought they were the same. If not, what exactly do you fill out to file as a trader?
    #11     Mar 15, 2001
  2. RAY


    1. Thanks White. Do you think that if he files for MTM for 2001 will he be able to realize those losses in 2001?

    2. Anyone can file as a trader in a schedule C. Your accounting method will not change though (schedule D), but you can write-off some of your trading expenses.

    MTM is all schedule C (pretty much).

    3. My question: I am hearing that it IS possible to elect MTM (475) late, and to do this one hsas to do something called a "Rev. Proc. Letter." Does anyone know anything about this?

    #12     Mar 15, 2001
  3. white17


    I believe it is too late for your brother to take advantage of MTM of tax year 2000. However, the way I understand it if he elects MTM with his return this year it will become effective with tax year 2001 filed in spring 2002.
    There is more to MTM than just schedule C. A trader may file expenses on schedule C but still not elect MTM. The election of MTM allows a trader to ignore wash sale requirements and a host of other data entry issues. It simplifies some things but the actual return itself can get complicated.....particularly in the first year.

    Yes there is a REV. PROC. that sets out all the boilerplate regarding MTM.

    I urge you to go to http://www.greencompany.com and read. There is everything you need to answer your questions. FULL DISCLOSURE; I am a client of Bob Green's but in no way receive anything from directing you to him. I am very happy with the service.
    #13     Mar 15, 2001
  4. RAY


    1. Thanks again White...

    2. I went to "Green," and read the entire site (I think), and did not find what I was looking for. I assume I have to buy one of his packages to get the information I am looking for? If so, which package? Have you seen the Tax Eamples Guide?
    #14     Mar 15, 2001
  5. white17


    Yes I've seen them They are worth the price when you consider the alternative. There are several scenarios among the combinations of trader with/without MTM and with gains or losses.
    #15     Mar 15, 2001
  6. Ray,

    Go to http://www.fairmark.com and click on Tax guide for traders. They also have a board and will answer questions free of charge.
    #16     Mar 15, 2001
  7. Dustin



    To be honest I am terrible with tax stuff, and let my accountant handle everything. I'm not sure where you mark the Trader Status box. Maybe someone else here knows.

    I think Thestreet.com has some good info if you want to know more.
    #17     Mar 15, 2001
  8. Andre


    What is the difference between filing as a trader and filing MTM? I always thought they were the same. If not, what exactly do you fill out to file as a trader?

    I know this is an old discussion, but we recently had a chat with Traders Accounting and we touched on many filing issues, the pros and cons of different vechicles for setting up a trading business. Check out the Chat log.

    They'll be doing a monlthy chat through the tax season.

    Nov. 18: Active Trader Taxation
    Dec. 18: Mark-to-Market Accounting and Section 1256 Contracts
    in Jan.: Passthrough Entities
    in Feb.: Corporations and Combination Structures
    in Mar.: Retirement Plans for Traders

    #18     Oct 31, 2003