Q: Mark to Market requirements....

Discussion in 'Trading' started by mindgame, Apr 4, 2001.

  1. mindgame


    How does one go about setting up a mark to market benefit...

    Also what type of business license is required... Is a sole propriator (sp?) the minimum requirement sufficient?? Or does one have to setup a corporation or such to apply for this...

    thanks in advance :)

  2. mgregor


    You don't have to incorporate or anything, you just elect mark to market. You need to elect mark to market by April 16, 2001 in order to qualify for using it on your 2001 tax return.

    As far as I know, you just need to demonstrate that your only source of income comes from your substantial, short term trading, in which you are directly involved on a daily basis.

    You can get more information at the following sites:http:



    As far as I know, the only negative aspect in electing MTM is if you have large carry over losses from previous years, which would be rendered useless with MTM.

    It's probably a good idea to hire a professional firm to handle your tax return, at least the first one, so you can see exactly what is required.

  3. Hi Mindgame,

    You do not have to be Inc. to elect M to M. You do however have to file an election with the IRS with your taxes this year to elect M to M for next years taxes. If you did not file your election with last years return for this year you can not use M to M for your 2000 taxes. You would have had to filed for the change of accounting with your 1999 taxes or request for extension to use for this year. You then file out form 3115. Hope this helps.
  4. I spoke to someone from the IRS today. Even if you have filed taxes for 2000, you can still make an election for Mark to Market for 2001 before April 16th. Just send them a letter saying that you want to make the election, preferably attaching a copy of your 2000 return, before April 16th.