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Further guidance on making the mark-to-market election.
At this point you should have completed the first part of the mark-to-market election requirements, as described on the preceding page. Don't try to follow the procedures here until you've followed the earlier procedures!
You were waiting for the fun part, and here it is. When you file your return for the year the election is effective, you need to attach Form 3115. You also have to send a copy of Form 3115 to the IRS national office. Be sure to get the current version of this form. As of this writing, it is the December, 2003 version.
Form 3115 is a delightful concoction of arcane questions, many of which only a tax professional can answer. The good news: only the first three pages of this eight-page monster apply to you. Here are some tips in grappling with Form 3115 (based on the most current version of the form when this was written):
You need to attach a statement something like the following:
If you've been paying attention, you know you need to file this form a year after you filed the original election. When electing for the year 2005, the original election is filed with your 2004 return in April 2005, but Form 3115 is filed with your 2005 return in April 2006.
Sign the form and attach it to your tax return. In addition, no later than the date you file your tax return, send a copy of Form 3115 and the attached statement to the address indicated in the instructions for this form.
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