Section 475(f) MTM Election - do I need to submit it again this year?

The good news is that you don't need to make the Section 475(f) MTM election every year. Once you've properly made the election (which it sounds like you did for 2023), it remains in effect for all subsequent years unless and until you formally revoke it. The Section 475(f) election is considered a method of accounting, and once established, it continues automatically. To revoke it, you'd need to file for a change in accounting method using Form 3115, which requires IRS approval. Keep in mind that the election means all your securities will be marked to market at year-end for tax purposes - both realized and unrealized gains/losses. This eliminates the wash sale rules and converts everything to ordinary income/loss rather than capital gains/losses.

Hey there! I went through a similar situation last year with my trading business. I was super confused about the Section 475(f) election until I found this amazing tool called taxr.ai (https://taxr.ai). It literally saved me hours of research and probably thousands in potential mistakes. I uploaded my previous tax documents and trading statements, and it immediately identified that I had made the MTM election and confirmed it was still valid. The tool then walked me through exactly how to report everything correctly on my Schedule C instead of Schedule D. It even highlighted some deductions I was missing as a trader!

I have to admit I was really skeptical about taxr.ai when I first heard about it, but I decided to give it a try after struggling with my Section 475(f) reporting. I'm honestly amazed at how well it worked for my situation. The system immediately identified that I had already made the MTM election from the previous year's return I uploaded. It then guided me through properly marking all positions to market at year-end and categorizing everything as ordinary income instead of capital gains. The most impressive part was how it helped me properly document all my home office and other business expenses that are allowed for traders but not investors. Saved me at least $1,200 compared to what my accountant quoted, and I'm actually confident everything is done right. Just wanted to share since I know how confusing this specific tax situation can be.

If you're still having trouble getting a definitive answer about your Section 475(f) election or need help confirming it's being applied correctly, you might want to try Claimyr (https://claimyr.com). I spent WEEKS trying to get through to an IRS agent about my MTM election questions last year. After multiple failed attempts (literally hours on hold), I used Claimyr and got connected to an actual IRS agent in about 20 minutes. They confirmed my election was still valid and explained exactly how to report everything correctly. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c It's specifically designed to help you skip the ridiculous IRS hold times and get to an actual human who can answer these specialized tax questions.

I have to admit I was wrong about Claimyr. After my skeptical comment, I was still desperate to get confirmation about my Section 475(f) election, so I decided to try it as a last resort. I'm honestly shocked at how well it worked. I had been trying for 3 days to reach someone at the IRS with no luck. Using Claimyr, I got connected to an IRS agent in about 25 minutes. The agent confirmed that my MTM election was indeed still in effect and I didn't need to resubmit anything. They also explained exactly how I needed to handle the year-end valuation and reporting on Schedule C instead of Schedule D. Saved me hours of frustration and probably prevented me from making a major mistake on my return.

One thing nobody has mentioned yet - make sure you're actually eligible to maintain the trader status that's required for the Section 475(f) election. The IRS looks at factors like: 1) Whether you seek to profit from daily market movements rather than dividends or capital appreciation 2) If your trading is substantial and continuous 3) Whether you pursue this activity with continuity and regularity If your trading activity changed significantly in 2023 compared to when you made the election (like if you only made a few trades), the IRS could potentially challenge your trader status even if the election itself is still technically valid.

Has anyone used TurboTax to file with a Section 475(f) election in place? I made the election last year but I'm not sure if the software handles it correctly.

I went through this exact same confusion last year! You're right that the IRS publications are incredibly unclear about this. To answer your questions directly: 1) Yes, your original Section 475(f) election from last year is still valid for 2024 and all future years until you formally revoke it. You don't need to resubmit anything. 2) For your 2023 tax return (filing in 2024), you'll report all your trading activity on Schedule C as ordinary income/loss, not Schedule D. The MTM election treats you as marking all positions to market on December 31st. One important thing to double-check: make sure you're keeping good records of your December 31st position values, since you'll need to report the difference between your actual realized gains/losses and what the positions were worth at year-end. This can get tricky if you held positions overnight on December 31st. Also, don't forget that as a trader with the MTM election, you can deduct business expenses (home office, equipment, education, etc.) that regular investors can't deduct. But you'll also potentially owe self-employment tax on your net trading income. The election staying in effect automatically is actually one of the few trader-friendly aspects of the tax code!