-8-
election. See Lehrer v. Commissioner, supra. The legislative
history indicates that the Secretary has authority to prescribe
the time and manner of the mark-to-market election. H. Rept.
105-148, at 446 (1997), 1997-4 C.B. (Vol. 1) 323, 768; see Lehrer
v. Commissioner, supra.
The Commissioner has prescribed procedures detailing the
requirements for a mark-to-market election pursuant to this
authority. Rev. Proc. 99-17, supra. A taxpayer wishing to make
a mark-to-market election must file a statement electing the
mark-to-market accounting method no later than the due date for
the tax return for the year immediately preceding the election
year. Id. sec. 5.03, 1999-1 C.B. at 504. This statement must be
attached to that tax return or to a request for an extension of
time to file that return. Id.
Petitioners and SPK argue that they made effective mark-to-
market elections for 2000. We disagree. Petitioners and SPK
were required to attach a statement electing the mark-to-market
accounting method to their respective tax returns for 1999 to
timely make a mark-to-market election for 2000. Id. Neither
petitioners nor SPK attached any election statement to the 1999
return.3 Instead, petitioners filed their election statement in
3Petitioners argue that the mark-to-market election
procedure outlined in Rev. Proc. 99-17, 1999-1 C.B. 503,
effectively eliminates any opportunity to make the election in a
taxpayer’s first year of securities trading. While these
petitioners may not have been able to make the election in their
first year of trading, we do not find the rule invalid for this
reason. In fact, the transition rules of sec. 475 required
securities dealers to identify securities excepted from the mark-
(continued...)
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