The National Directory of Certified Public Accountants

Ask A CPA - Day Trader

When Must My Day Traders Section 475(F) Election Be Made?

The Section 475(f) market to market election must be made by the due date of the previous year's tax return. The trader's short-term capital gains or losses are converted into ordinary income or loss. Losses that otherwise would have been limited to $3,000 are fully deductible against ordinary income in the current year. This election should be discussed with your local CPA.

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