475 Mark-To-Market Election, Form 3115, Day Trader Rules, Wash Rules

This post is a short section on making a mark-to-market election on Form 3115 form with 481 (a) adjustment . It is a summary of information from other places on the internet.

Basic Disclaimer: This statement is not tax advice and the statement itself is not direction for tax or any other purpose. If you choose to copy or imitate any description here in for any purpose, you are responsible for the actions taken. Serious restrictions apply. For example filing a form 3115 is not easily reversible. The IRS has a 5 year change rule for these types of transactions. This is one opinion that may contain errors.

The 3115 form involves filling out the form and writing a statement that is sent along with the form.

Fuzzi077 posted the following (in part) in response to this thread: https://www.reddit.com/r/tax/comments/12fxchy/475_marktomarket_election_form_3115_required/

1. in Part I (b), check box Other, in Description, enter "MTM Election".
2. Part II, I have No checked in all questions through 13
3. Part II, questions 14, 15, 16 note "Statement # 1 etc." for each (attached explanatory statements)
4. Part IV, question 26 enter the amount of increase/decrease. Mine said "The explanatory statement is available upon request" in the attached statement.
5. Part IV question 27 is Yes, question 25 and 28 are No.

From that I pieced together the following statement and included it with Form 3115:

"Mark to Market adjustment Statement

This statement is made based on Section 475(f).
The first tax year the election is effective is January 1, 2026
The statement applies to stock trades in [Company Name], Federal EIN ##-#######.

As generally trades are made and closed at the end-of-day and not carried over night or over accounting periods the Mark-to-Market accounting has no effect on income.  However, it does de-risk the company from getting caught in a situation where the actual gain or loss of a transaction is not accounted for as the gain or loss for tax purposes."

I chose the extra paragraph at the end because it is accurate, fulfills the "analysis" demand in the form but does not require a lengthy analytical explanation. I like the term de-risk because it allows me to state the actual reason I'm doing this. To not worry about the 30 day wash rules and puts me back on the simple sell-buy-fees&taxes = profit accounting which is another form of avoiding risk because it is simple, fare and honest. Simple being lest risk of a mistake than complex.