-9-
October 2001, and SPK filed its election statement in September
2001 with respect to their returns for 2000. They did not attach
any election statements to their returns for 1999. The election
statements they did file were each nearly 18 months late.
Accordingly, we conclude that petitioners and SPK did not make
effective mark-to-market elections in compliance with Rev. Proc.
99-17, supra, for tax year 2000.
Petitioners argue in the alternative that their and SPK’s
ineffective attempts to make mark-to-market elections for 2000
should nevertheless be construed as valid elections for 2001. We
disagree. Petitioners have not cited any authority for us to
ignore the year in which they designated the election to be
effective. There is no basis in Rev. Proc. 99-17, supra, to
construe the unsuccessful attempted mark-to-market elections for
2000 to be effective elections for 2001 instead. Rev. Proc. 99-
17, supra, requires that the statement used to make the election
specify the first taxable year for which the election is
3(...continued)
to-market election rules very promptly after enactment of the
law. See Notice 93-45, 1993-2 C.B. 334; see also Taxpayer Relief
Act of 1997, Pub. L. 105-34, sec. 1001(d)(2)(B), (4)(B)(i), 111
Stat. 908. The requirement to make the mark-to-market election
before the year it is to be effective in Rev. Proc. 99-17, supra,
is therefore consistent with the prospective operation of sec.
475 indicated by the transition rules’ prompt identification
requirements. We also note that new taxpayers (those for which
no tax return was required to be filed for the year preceding the
election year) may make a mark-to-market election in the first
year of their existence by placing a statement in their books and
records within a certain time. Rev. Proc. 99-17, sec. 5.03,
1999-1 C.B. at 504. While petitioners and SPK are not new
taxpayers under this provision, we note that the requirements of
Rev. Proc. 99-17, supra, are not as onerous as petitioners imply.
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