Conclusions from Investor/Trader Case Studies

Introduction
The purpose of this post is to analyze the difference between different

Calculations

Conclusions
In our set of examples, the trader that made the mark to market election (IRC 475) resulted in the preferential tax treatment in the loss year as well as the year where the fair market value of Bitcoin was less than it's cost basis. The trader had preferential tax treatment in the year where the business was profitable and the fair market value of Bitcoin was greater than it's cost basis. Note that a mark to market election is permanent unless permission is received from the IRS to revoke it.

To the extent that capital losses cannot be offset by capital gains, only $3,000 may be deducted per year. Excess capital losses may be carried forward and deducted against future income. Net operating losses must be carried back 2 years (unless an election is made to forgo the carryback) and subsequently carried forward for 20 years.

References
https://steemit.com/tax/@alhofmeister/case-study-61-wash-sales-investor-tax-liability
https://steemit.com/tax/@alhofmeister/case-study-62-wash-sales-trader-tax-liability
https://steemit.com/tax/@alhofmeister/case-study-63-wash-sales-mtm-trader-tax-liability
https://steemit.com/tax/@alhofmeister/case-study-64-wash-sales-investor-tax-liability-loss-year
https://steemit.com/tax/@alhofmeister/case-study-65-wash-sales-trader-tax-liability-loss-year
https://steemit.com/tax/@alhofmeister/rledf-case-study-63-wash-sales-mtm-trader-tax-liability
https://steemit.com/tax/@alhofmeister/case-study-67-wash-sales-investor-tax-liability-high-eoy-fmv
https://steemit.com/tax/@alhofmeister/case-study-68-wash-sales-trader-tax-liability-high-eoy-fmv
https://steemit.com/tax/@alhofmeister/case-study-69-wash-sales-mtm-trader-tax-liability-high-eoy-fmv

Disclaimer
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.