Wash Sale Rule / Mark to Market Election

Discussion in 'Professional Trading' started by fishtrader, Oct 17, 2010.

  1. I've been trading about 6 months now. I have a question about tax which is 35% of our profits. Here's the example

    Lets say you made $50,000 and loss $30,000 for the year

    That means you made a profit of $20,000

    But based on wash sale rule, you have to pay 35% based on your gains which is $50,000 x 35% = $17,500

    Which you will end up making $20,000-$17,500 =$2,500

    But if you elected Mark to Market Election, you will pay tax on your profits only which will be

    $20,000 x 35% = $7,000

    So you end up making a profit of $20,000-$7,000 = $13,000

    So my question is, Any experience trader here elect the Mark to Market Election? (Schedule D) Because the wash sale rule really eats up all our profits.