BTW, you can still be treated as a “sole proprietor” type of taxpayer for 2021 and have “trader” status (assuming you meet the criteria) but you just can’t elect Mark to market (section 475) for 2021 anymore as it’s past May deadline this year (usually April). If you form a legal entity in 2021 (e.g., an LLC or LLC with an S-corp election) then you get 75 days…Legal entity selection, cost/benefit/etc., is a big deal as while some folks absolutely should be in an entity, which type/why/etc., some probably don’t need to outlay the expense, effort. You don’t have to have mark to market elected to be in the business of trading (“trader” status) but you do need to have trader status to probably benefit from various tax business benefits. Hope this helps…there’s tons of info online about this stuff. I’d go with the 2 folks I mentioned for further research. Many others will gloss over things or oversimplify for clickbait or quick fees.
September 27, 2022