Exactly What is Mark to Market?According to the IRS: "A trader in securities or commodities may elect under section 475(f) to use the mark-to-market method to account for securities or commodities held in connection with a trading business. Under this method of accounting, any security or commodity held at the end of the tax year is treated as sold (and re-acquired) at its fair market value (FMV) on the last business day of that year." What this basically means is that all open positions at year end are "marked to market" or priced to year end market prices to close out the position on paper. Your open positions are still open, but now the year end prices become the cost basis of these going into next tax year. Learn More... Mark to Market Pros and Cons 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. |