No, you can elect mtm for stocks only or stocks and futures. Yes, you lose the 60/40 advantage if you elect it for futures, but it is a good deal for a loser because if his wife works or he has dividend income, he can then take the whole loss in the year it occured. But like I say, you gotta know by $/15 of the current year if you are going to be a loser, so this mtm election is clearly meant for stock traders, so be sure if you elect it to specify securities only.
http://www.tradersaccounting.com/index.asp http://www.thestreet.com/funds/taxes/667635.html http://www.fairmark.com/traders/filing.htm
Of course, there is a ton of info at http://www.greencompany.com - and a couple of reads on 1256 contracts.
Can anyone recommend a good up-to-date book on filing for taxes with futures which includes some sample returns? Any good links to any pages which show the 40/60 and how to apply it? Suppose I make 10k, I put 4k short term and 6k long term. Does it IRS know why I'm doing that? Does the brokerage split it up for you? What if you just put all of it long term? =)
Go to www.irs.gov and download Form 6781 Gains and Losses from Section 1256 Contracts and Straddles and its instructions. Futures are Section 1256 Contracts Marked to Market and go in Part 1. Part 1 is very simple and in 9 short lines helps you calculate the 60/40 split and tells you to transfer the results to your Schedule D.
it's on form 6781, that's where you split it up, then you have to go to sched d and figure out how much you owe.