Post #1377 by TGMark on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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Has anyone done that? Any experiences? https://www.thetaxadviser.com/issues/2010/feb/sec4...

One thing that was a PITA when actively trading MI screens is wash sales.
On the one hand, they don't really matter as it is just pushing around when taxes are paid on gains.
However, if you trade in both taxable and non-taxable accounts, you lose the tax deduction for losses.
It is not clear to me whether brokerages look across all accounts when determining wash sales.
But strictly speaking the IRS does not care, it is up to you to report things correctly.

I've read that the mark-to-market tax election is a way to avoid that, assuming one qualifies.
For an active MI trader, I believe it is possible. However, there are probably pluses and minuses to doing this.

Mark

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