If you’re an active trader generating significant volume and profits, you’ve likely heard about “mark-to-market” (MTM) accounting under IRC Section 475(f).
The wash sale angle here is huge for anyone doing systematic entries and exits. Converting that 20% LTCG rate into 37% ordinary sounds brutal on paper, but when you factor in the wash sale nightmare and the $3K capital loss cap, the math flips fast. I've watched friends carry forward six-figure losses for years while stil paying taxes on W2 income they could've sheltered.
The wash sale angle here is huge for anyone doing systematic entries and exits. Converting that 20% LTCG rate into 37% ordinary sounds brutal on paper, but when you factor in the wash sale nightmare and the $3K capital loss cap, the math flips fast. I've watched friends carry forward six-figure losses for years while stil paying taxes on W2 income they could've sheltered.