How to elect Mark to Market status with the IRS
IRS Pub 550 states:
How To Make the Mark-to-Market Election
To make the mark-to-market election for 2009, you must file a statement by
April 15, 2009
This statement should be attached to either your 2008 individual income
tax return or a request for an extension of time to file that return.
The statement must include the following information.
- That you are making an election under section 475(f) of the Internal Revenue Code.
- The first tax year for which the election is effective.
- The trade or business for which you are making the election.
If you are not required to file a 2008 income tax return, you make
the election by placing the above statement in your books and records no later than March 15, 2009. Attach a copy of the statement to your 2009 return.
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Do not file form 3115 at this time as it may cause you to lose your MTM status.
After making the election to change to the mark-to-market method of
accounting, you must change your method of accounting for securities when you
file your taxes for the first year using MTM accounting. You do this by filing Form
3115 - Application for Change in Accounting Method.
Form 3115 is also where you attach your section 481 adjustment - see
How to report gains & losses marked to market.
Once you make the election, it will apply to the current tax year and all later tax years,
unless you get permission from IRS to revoke it. The effect of making the
election is described under Mark-to-market election made, earlier.
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For more details on the mark to market
election and how to make it,
see Pub. 550,
Investment Income and Expenses;
sections 475(e) and 475(f)
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Also see:
Rev. Proc. 99-17 on page 52 of
Internal Revenue Bulletin 1999-7 at
www.irs.gov/pub/irs-irbs/irb99-07.pdf.
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MTM Election Deadline:
Unless you are a new taxpayer, the election must be made by the due date
(not including extensions) of the tax return for the year prior to the year for
which the election becomes effective. In other words, if you have not made this
election by April 15 of the current tax year, then you have to wait till next
year to do so.
Learn More... How to Report
Please note: This information is provided only as a general guide and is not to be taken as official IRS instructions. Armen Computing Ltd. does not make investment recommendations nor provide financial, tax or legal advice. You are solely responsible for your investment and tax reporting decisions. Please consult your tax advisor or accountant to discuss your specific situation.
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