Generally, the IRS requires that the "mark-to-market election must be made by the due date (not including extensions) of the tax return for the year prior to the year for which the election becomes effective." How is the Mark to Market Election made?
The Mark to Market Election is made by attaching a statement either to your income tax return or to a request for an extension of time to file your return. The IRS requires that this statement should include the following information:
1. That you are making an election under section 475(f) of the Internal Revenue Code.
2.The first tax year for which the election is effective.
3.The trade or business for which you are making the election.
Taxpayers refer to the Form 1040, Schedule D Instructions (see below) for further instructions on how to make the mark to market election. http://www.irs.gov/pub/irs-pdf/i1040sd.pdf What is the tax treatment of sales of securities in connection to trading business?