Tax News

CCH (cch.taxgroup.com) reports:

  An individual was not entitled to use the mark-to-market accounting method for trading losses he incurred for the tax year at issue because he did not make a timely mark-to-market election and did not qualify for a time extension under Reg. §301.9100-3 to file the election. He did not file his statement of election on the due date for his tax return, but filed it three years later with his amended return.

  His argument that he did not have a reasonable amount of time to file the election because of the short period of time between the date of issuance of Rev. Proc. 99-17, 1999-1 CB 503, and the due date for making the election was without merit. The individual could not have made a timely election, even if Rev. Proc. 99-17 had been issued earlier, because he admitted that he became aware of Code Sec. 475(f) almost three years after the due date for making the election.

  Further, the individual was not granted an extension of time to file the election because he used hindsight in filing the late election and, therefore, did not act reasonably and in good faith. He was not permitted to take advantage of his subsequently acquired knowledge that he incurred trading losses and, several years later, elect retroactively the most advantageous accounting method.

  Affirming a DC Calif. decision, 2006-2 USTC ¶50,529.

K.Z. Acar, CA-9, 2008-2 USTC ¶50,564

Other References:

 
Code Sec. 475

  CCH Reference - 2008FED ¶22,268.20

  CCH Reference - 2008FED ¶44,014B.10

  Tax Research Consultant

  CCH Reference - TRC SALES: 45,360
CCH Reference - TRC SALES: 45,360.10
CCH Reference - TRC SALES: 45,360.15