How to Complete IRS Form 4797 for Section 475(f) Mark-to-Market (MTM) Traders

[@shishya99]

Thanks for this very helpful video. i have substantial losses from prior years that I've entered on prior 4797 filings. I've forgotten where i entered the loss carry forward on the 4797. Please indicate where I make the entry to carry forward the loss once i've adjusted it for the year's transactions. Thanks.

[@brandonwhitman2920]

Jason thank you for making this. It made completing the process much easier. Could you do one or comment about Form 3115? I only see that it is required but no one describes how to fill it out correctly. Thx!

[@tammyf8326]

The form 3115 needs to be sent to the IRS to the location in Utah. This may be in addition to submitting one with your previous years tax return but I’m not sure if it’s needed at both IRS locations.

[@annhenry1226]

how do you determine ordinary gains/short term gains from a 1099 ? CPI's use monthly statements instead ?

[@nickolouszahar2193]

Why do you have the "Gross Sales Price" on line 1a of Part I. My understanding is that we report in Part II, since we can not or do not report in Part I or Part III. I am an Active Trader, Elected mark to market accounting.

[@steveschneider460]

I see notes in these questions and other places about informing your broker that you are choosing Mark-to-Market. Why would i do that? If i did that would i expect different reporting from the brokerage? (Would i expect "4797" [or 8995] style exports of transactions?)

[@tammyf8326]

I believe if you fill out and submit the affidavit with your broker attesting to that you have elected Mark to Market with the IRS then you would not be subjected to the wash rule. Your broker should be able to answer to that.

[@VictoriaAndDaisyEntertainment]

Since the 475 income is not self-employment income, can I write my trading (TTS) sole proprietorship's business expense and home office expense on schedule C off the 475 ordinary income? Or do I need to get other self-employment or W2 incomes? Thanks. About trader records, can i just attach my 1099 that would have all trade records, and simply use the ending equity holdings $$ of the year - beginning equity holdings $$ of the year to get the mark-to-market gain or loss?

[@sharifolayan6271]

Thanks Jason for the details. Amazing video. Question: if I create an entity for day trading “LLC” will MTM accounting automatically be enabled?

[@realrajiv]

no. Assuming new LLC, within 75 days you will need to make the election via 'internal election' (basically a letter that you will attach to return), then engage with your broker to let them know you are making MTM election. They need to enable change in accounting method for your account.

[@gl.72637]

Engaging broker is also required if you are individual currently and not a LLC? How to transition from an individual to a LLC? Need to create separate bank account, new trading account in the name of LLC, move all positions held into this new account? Not finding a full video on this

[@eliflores8805]

@@realrajivwhen you send the form does the IRS send you something to confirm?

[@realrajiv]

@@eliflores8805 No. IRS does not send you anything to confirm. You will attach the election letter to your return and that is it.

[@eliflores8805]

Ok thank you. I did that earlier this year with a new LLC I opened. But my broker ask me for a confirmation from the irs in order for them to make my acct MTM. So it confused me since the it’s never sent anything.

[@jessestone]

Thanks very much for this video. What if this same trader had collected some dividends from stocks that he had held for a few days? Would these dividends go on form 4797 also, or on a different form?

[@other6724]

For gains, nobody talks about MTM, it is treated as ordinary gains, but is is subjected to tax table and 28% Worksheet?

[@Algebra1Handsome]

I have bought few stocks in 2021 and sitting on huge losses. If I sell those stocks in 2024 ( this year ), and select MTM when filing taxes , will those losses be treated as regular losses or capital losses for 2024?

[@jolu5589]

What happens to if the person has retirement accounts (Roth IRA and/or Rollover IRA) ? Do they have to sell those stocks as well?

[@tammyf8326]

No!

[@nikij2383]

Great info, I have been watching videos on the 475f election, but no one explains how exactly to make that 475f election with your tax return or extension. I have read you only need to send in a statement, but I cannot find any examples of this.

[@gl.72637]

I found this link today where someone gave an example of the statement needed. I am just using that example.

[@nikij2383]

@@gl.72637 where is the link?

[@nikij2383]

@@gl.72637 Could you provide the link for me please?

[@stevetolfa]

How do you make the initial year declaration?

[@mbrinkmann1881]

i set up an LLC and made the timley selection. However after submitting the mark to market election, the IRS has not sent me back any acknowledgement that my mark to market status has been accepted and valid. The brokerage i use requires some acknowledgement form by the IRS, however i have received nothing. What do i need to do to?

[@brandonwhitman2920]

They won't I made copies of my filling and sent certified mail. But you have to just move forward and assume they received it.

[@mingmingliu7234]

I submitted the 475f election for year 2022 in last April via the 2021 tax return extension. But I didn't receive any notification from IRS about the 475f election. Now is the deadline to file 2022 tax, should I go ahead apply 475f Mark to Market accounting in my 2022 tax return? I searched my tax filing records with IRS, IRS received my 2021 tax extension request but it doesn't mention the 475f election as part of the extension submission. What should I do?@@brandonwhitman2920 thank you.

[@gl.72637]

What about the brokerage wanting some acknowledgment from IRS?

[@AmandeepSinghSaini]

Hey Brandon I'm filling for this year, Is trading your only (full time job)? Please help @@brandonwhitman2920

[@tammyf8326]

I believe I had read that you will not receive acknowledgment from the IRS. My broker had me submit an affidavit to them stating that I had completed and submitted the appropriate forms to the IRS

[@angelicabergman8701]

Thanks!

[@JasonDKnott]

Thanks for the support!

[@gkadery01]

In Charles Schwab web site they are saying I will have complete Form 3115 for Mark to Market. Now I am confused. When do I have to file this form for 2024 taxes ? Don't I file with 2023 taxes before April 15. I need help.

[@tammyf8326]

For 2024 you must submit that by the deadline of April 15, 2024 with your 2023 tax report. Also, that 3115 form needs to be sent to two different addresses, one with your tax report and another copy to the Utah address.it’s very difficult to find that specific information online.