MTM question

Discussion in 'Taxes and Accounting' started by dcwriter2, Oct 17, 2021.

  1. I trade a lot of UVXY options, UVXY, and VIX options. Are all three of these instruments MTM regardless of whether I choose that form of accounting or not?
  2. Fonz


    You can also elect MTM for this options. It is an accounting election for the trader entity (individual or company) that will apply for all options if you trade options, not just few of them, stocks, ETFs, etc.
    You probably can segregate investment account, that way your investments are not MTM.
    This has to be well documented in advance. I would suggest to talk to a specialized accountant.
  3. Fonz


    You can Google: Sec. 475 Mark-to-Market Election
  4. Girija


    Vix options are 1256 contracts
    Uvxy proshares issue k1. So 1256. Some brokers may make double entry on 1099 as well so check cost basis when filing.
    Uvxy options is technically unclear. Some brokers do treat as 1256. When you file you can choose 1256 irrespective of what broker does since it has prevalence. Ask your broker.
    Electing mark to market is an acctg preference.
    Do you read any fine prints before trading something you don't comprehend?
    All of these are searchable. Remember to hire a pro for filing your taxes.
    There are several unclear items in tax ruling and on a case to case basis irs issues revenue rulings. Cpa will know how to search those and help you file accurately.
    horizon and Lou Friedman like this.