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There is no inconsistency. I do not elect MTM section 475
accounting, which is optional with trader status. I sacrifice the
allowance of unlimited losses in return for favorable treatment of
gains. This is why the tax-payer must elect section 475 early in the
tax year, before he or she knows the trading results of the tax year.
I had this explained to me by Ted Tessler, who was kind enough to
send me an email on this subject a number of years ago.
On April 15, I'm still optimistic enough to think it will be a profitable
trading year. I also know that the year after two successive loss
years I will be a crossing guard rather than a trader and can use a
loss carry-forward.
On 23 Jul 2001, at 17:59, Roger L. Shepherd wrote:
> It looks as if we have a disagreement of experts. I was quoting from
> Ted Tesser's article on page 90 of the June 2000 issue of Active
> Trader magazine in which he discusses the 475 election and
> specifically states that a 475 election eliminates the preferential
> tax treatment of the 60/40 split for Section 1256 contracts.
>
> Guess we all better do our homework before next tax season.
>
> For those of you who are not familiar with Ted Tesser. He is a CPA who
> specializes in income taxes for traders and investors. His web site
> is at the following URL
>
> http://www.taxtrader.com/home.html
>
JFB
NYC
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