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About me: I'm a trader with trader tax status. I do not have a company. I did have a few trading accounts, but most of the time I traded them separately.

I'm trying to hire a CPA to do my taxes. I hired a firm who charged me for incorporation, tradelog, etc. then decided they needed more billable time. In all, for me to file my personal return is going to come to $4K. Most of that takes the form of 'trade accounting', meaning they go over the 1099s from the brokerages and manually keep track of stuff.

I reached out to another accountant who told me that because I made a mark to mark election wash sale rules are a non issue and I don't need to pay all this money for the accounting services after all. Of course, he wants me to retain him--so I'm unclear who is right in this situation.

If you elect mark to mark, do you need to have custom 'trade' accounting services? Or is this just a scam to milk me for even more billable hours (the second accountant suggested this was the case).

Thanks!

  • Did you mean "mark to market"? – Chris W. Rea Apr 5 '18 at 23:52
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When you say that you hired a firm that charged you for incorporation, tradelog, etc., are you referring to the tax accounting program called Tradelog or something else?

I have used Tradelog. It's an excellent program. It keeps track of all trades and account for wash sales, P&L, etc. But if you have Professional Trader Status, you are eligible for mark-to-market (MTM) accounting. That means that there are no long-term capital gains or losses and the purchase and sale of securities do not have to be reported. All you have to report is the account values at the beginning and end of the tax year to determine your profit or loss. You would not need Tradelog or any 'trade accounting'. That means that the other accountant is correct - "wash sale rules are a non issue and I don't need to pay all this money for the accounting services after all."

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