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Last Chance - Traders:
Just a reminder to all those Traders considering a Section 475 - Mark to
Market election (this will allow ordinary writeoff of all losses over $3,000
and allow no wash sale rule consideration) the deadline for making the
election may be here:
For those electing for 1998 you do not have to elect on the extension - but
only on the properly extended tax return - so you can extend and then decide
when you file the return in August or October.
For those filing by April 15th, you must make the election on the tax return.
For those who don't elect for 1998 but want to elect for 1999, you have to
make the election on the 1998 extension by April 15th, 1998.
So keep in mind if you don't elect Section 475 for 1998 but want to for 1999
you have to decide that now!
It has always been my position that you should extend your return anyway, but
this year it is especially important to do so. They keep changing things,
and the later you make the electin for 1998 the better. They may come out
with new methodology and rulings by the summer.
Also just be aware that the government still isn't sure how they want you to
elect Section 475. They have told us they will come out with a form later
this year, but until then, just a simple statement attached to the 1998
extension (for 1999) will do.
List: Your name, Social Security Number and Tax Year: 1999
State that you qualify as a "Trader in Securities" in accordance with the
recent Tax Acts of 1997 and 1998.
State that according to IRS Revenue Procedure 99-17, you are electing the
475 "Mark to market accounting method for traders and dealers".
State that you and were engaged in the trade or business of managing your own
trades and here by elect mark-to-market accounting treatment in accordance
with IRS Revenue Procedure 99-17.
Isn't tax simplicifaction GREAT!
Ted Tesser, CPA
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