MTM for a futures options account and standard accounting for an equities options account

Discussion in 'Taxes and Accounting' started by SoCalOptionsWriter, May 5, 2022.

  1. Questions:
    1. Can I have two accounts with two different accounting methods for taxes?
    2. if so, how should I separate them?
    3. Is MTM automatic for futures options or do I need to file paperwork with the IRS?
    4. I believe I qualify for TTS on both accounts. Do I need to do any paperwork to apply for TTS or is it just a given?
     
  2. Robert Morse

    Robert Morse Sponsor

  3. So, I presume I can have both. (My fear is the equity account going MTM, although I like the Sec. 1256 for some instruments in that account.) No need to separate them?
     
  4. Robert Morse

    Robert Morse Sponsor

    I do not follow your question. 1256 contracts are already MTM. If you want to avoid wash sales on equities, you will have to apply with the IRS for that. They are already separate.

     
  5. zachbauer

    zachbauer

    If you have two jobs, you can use two different accounts for payroll and taxes. You can also combine them into one account. Most likely, MTM is not automatic for futures options, and you need to file paperwork with the IRS. I would suggest you open a separate account for your stocks after all. That way, you'll know exactly the net income from the stocks and your core business. If you need to calculate wages, you can use https://www.payrollindex.com/pro-rata-salary-calculator/. This tool is suitable for both employers and employees.
     
  6. Robert Morse

    Robert Morse Sponsor

    zachbauer - Futures and options on futures are ALL 1256 contracts and MTM.
     
    SoCalOptionsWriter likes this.