I am single and file form 1040. If I decide to start trading for a living as a sole proprietor, how do I tell the IRS Im going to file under Trader Status and when must I tell them?
You tell them by filing a Schedule C along with your form 1040. You usually need to do that by April 15th of the following year. 5.2) Ok, so I’m going to start filing under Trader Status as a sole proprietor, how do I now tell the IRS I’m going to use the mark-to-market method of accounting right from the start and when must I tell them? You tell them by filing an election statement attached to either form 1040 or form 4868 no later than April 15th of the year in which you started trading. e.g. the previous year’s tax return. The election statement must be clear that it applies to your securities trading or your commodities trading (or both your securities trading and your commodities trading).
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