- Four dates shape the 2026 return, and only one is in December: 31 Dec 2026 (last trade date), 15 Jan 2027 (fourth-quarter estimate), 15 Mar 2027 (S-corp election for a 1 Jan start) and 15 Apr 2027 (§475(f) election for 2027).
- A harvested loss only counts if the wash-sale window does not undo it. For a 31 Dec sale the window runs 1 Dec to 30 Jan, so the first safe repurchase date is 31 Jan. It reaches across accounts, including IRAs, where the disallowed loss can be lost permanently.
- Only $3,000 of a net capital loss reaches other income each year; the rest carries forward. A valid §475(f) election is the usual route past the cap for the positions it covers.
- Regulated futures are marked to market on 31 Dec automatically — open gains are taxed this year whether or not you closed them, so there is little timing to play with.
- The §475(f) election for 2027 is due 15 April 2027 and an extension does not move it — which makes December the time to model it, not April.
- Equipment deductions need a trade or business and a placed-in-service date of 31 Dec; retirement contributions need earned income, not just capital gains. 2026 limits: $72,000 total, $24,500 deferral.
- Several of these cannot be undone after 31 December. Every situation varies — take the numbers to a CPA who works with active traders while there is still time to act.
Most traders think about taxes in April. For an active trader, a handful of the decisions that move the number most have to be made before the calendar turns, and several cannot be undone afterwards. This page is a planning map, not a to-do list: what each date governs, which choices expire on it, and which questions are worth putting to a preparer while there is still time to act on the answer.
Which dates actually matter, and which one is in December?
Only one of the four dates that shape a trader’s 2026 return falls in December. The others come afterwards, which is exactly why they get missed.
| Date | What it governs | Can you still act after it? |
|---|---|---|
| Thu 31 Dec 2026 | Last trade date that falls in 2026. Loss harvesting, equipment placed in service, and the automatic year-end mark on futures all key to it. | No — a 2027 trade date is a 2027 event |
| Fri 15 Jan 2027 | Fourth-quarter estimated tax payment for 2026. | You can pay late, but interest and the underpayment penalty run from this date |
| Mon 15 Mar 2027 | Form 2553 to be treated as an S corporation from 1 January 2027 (two months and fifteen days into the year). | Late-election relief exists, but it is a request, not a right |
| Thu 15 Apr 2027 | The §475(f) mark-to-market election for 2027, due by the unextended due date of the 2026 return. Also the 2026 filing deadline and, on practitioner commentary we could reach, the adoption deadline for a first-year sole proprietor’s solo 401(k) to still take 2026 deferrals. | No — an extension does not move the election date |
That last row is the one that most often surprises people: the election for next year is due in April of the year after this one ends, and filing an extension for your 2026 return does not extend it.
How do wash sales change year-end loss harvesting?
Harvesting a loss means selling a position at a loss before year-end so the loss lands in the current year. It only works if the wash-sale rule does not take the loss back. Under §1091 a loss is disallowed when you buy substantially identical stock or securities within 30 days before or after the sale, a 61-day window centred on the sale date (the IRS explains the rule and the basis adjustment in Publication 550).
For a sale on 31 December 2026 that window is long in both directions: a purchase of the same security from 1 December through 30 January puts the loss at risk, and the first date outside it is 31 January. The disallowed loss is not simply gone — it is generally added to the basis of the replacement shares and recovered when those are sold — but that moves the loss into a later year, which is the opposite of what harvesting was for.
- It reaches across accounts. Buying back in an IRA can trigger the rule, and unlike a taxable buy-back the basis adjustment is generally not available inside the IRA, so the loss can be lost permanently rather than deferred. That is the version that hurts.
- It reaches across brokers. A 1099-B reports only what one broker saw, so a trader with several accounts can have wash sales no single form shows.
- “Substantially identical” is a judgement, not a list. A different share class or a correlated fund is not automatically safe, and the IRS has not published a bright line.
Our wash-sale guide covers the mechanics, and the wash-sale calculator will show whether a particular buy-back date puts a loss at risk before you place the order.
How much of a loss can I actually use?
Capital losses offset capital gains dollar for dollar. If losses exceed gains, only $3,000 of the net loss ($1,500 if married filing separately) can be set against other income in the year, and the remainder carries forward without expiry. For a trader with large losses and little other income, that cap is often a bigger constraint than any year-end timing choice, and harvesting more losses into a year that already exceeds the cap changes the carryforward rather than the current bill.
Two things sit outside that ordinary rule:
- Section 1256 contracts (regulated futures and similar) are taxed 60% long-term and 40% short-term whatever the holding period, and an individual with a net §1256 loss can generally elect to carry it back three years against earlier §1256 gains. That election is made on Form 6781 and is worth raising with a preparer if a bad year follows good ones. See futures taxes.
- A valid §475(f) election converts trading losses to ordinary, removing the $3,000 cap for the class of positions it covers. That is the subject of the next section, and it has a deadline structure that makes December the time to think about it rather than April.
What happens to futures positions on 31 December?
Regulated futures are treated as if sold at fair market value on the last business day of the year, whether or not you closed them. Open gains are taxed this year; open losses are deductible this year. A trader holding a large unrealised gain into the new year has therefore already realised it for tax purposes, and one holding a large unrealised loss has already booked it. The practical consequence is that there is little year-end “timing” available on this class of position, which is a different planning posture from stock.
Should I consider a §475(f) election for 2027?
The question belongs in December because the election cannot be made at the moment it becomes obvious. For an existing taxpayer it is made by the unextended due date of the prior year’s return (Rev. Proc. 99-17): 15 April 2027 for an election effective 1 January 2027. The statement can be attached to the return or to the extension request, and an extension of time to file does not move the date. A taxpayer starting a new trading business elects differently, by placing a statement in their books and records within two months and fifteen days of the first tax year’s start.
What the election generally does, and what it costs:
- Gains and losses on the covered positions become ordinary, and open positions are marked to market at year-end.
- The $3,000 capital-loss cap and the wash-sale rule generally stop applying to the covered positions.
- It can give up favourable treatment: long-term rates on holdings, and for futures the 60/40 blend, which an election on commodities generally converts to ordinary income.
- It is two separate elections — §475(f)(1) for securities and §475(f)(2) for commodities — and the statement has to name the one being made.
- It presupposes a trade or business, which is a facts-and-circumstances question (IRS Topic 429) — see the trader tax status screen.
The mechanics, the revocation route and the new-taxpayer variant are covered in detail on the mark-to-market page. The point for year-end is narrower: if the answer might be yes, the useful work is modelling both outcomes on this year’s actual numbers before April, not after.
Does loss harvesting work for crypto?
As the law stands today, §1091 applies to stock and securities, and digital assets are generally not treated as securities for that purpose. The One Big Beautiful Bill Act, signed in July 2025, did not extend the wash-sale rule to digital assets. Extension has been proposed repeatedly, most recently in H.R. 9172, but a bill is not law, and nothing here should be read as saying it is imminent.
Two cautions belong alongside that. First, “no wash-sale rule” is not the same as “any sell-and-rebuy is respected”: transactions with no substance beyond the tax result invite other doctrines. Second, exchanges that now report on Form 1099-DA do so account by account, so a buy-back on a different platform will not appear on the form that reports the sale. See crypto taxes and Form 1099-DA.
What can a trader with trader tax status still do before 31 December?
Several deductions depend on carrying on a trade or business, and an investor generally cannot take them: for 2026, miscellaneous itemised deductions remain suspended. Where trader tax status is a genuine fit, the December-sensitive item is usually equipment.
- Equipment and computers. The One Big Beautiful Bill Act raised the §179 expensing cap to $2.5 million (indexed for inflation) and made 100% bonus depreciation permanent for property acquired after 19 January 2025. Either generally requires that the asset be placed in service by 31 December, so a purchase delivered in January does not help the 2026 return. Section 179 is limited by business income; bonus depreciation is not, which can produce a loss. Whether a given purchase is deductible at all depends on the business-use facts.
- Not year-end-bound. Home office, data, software and education deductions follow the year they are incurred; there is little to gain by rushing them, and the case for them rests on the same trade-or-business question as everything else. Our trader deductions guide lists what typically qualifies.
How do retirement contributions work for a trader?
The constraint is earned income. Capital gains from trading are generally not compensation for retirement-plan purposes, so an investor-status trader with only capital gains usually has nothing to contribute against. A trader with trader tax status filing Schedule C, or a prop-firm trader with 1099-NEC payouts, has net self-employment income that can support a contribution.
- For 2026 the total annual-additions limit under §415(c) is $72,000, with an employee deferral limit of $24,500 and an age-50 catch-up of $8,000 on top.
- Under SECURE 2.0, a sole proprietor opening a first-year solo 401(k) can generally still make that year’s elective deferrals after year-end, if the plan is adopted by the unextended filing deadline. That point rests on practitioner commentary we could reach, not on the statute text, and plan providers apply it differently — confirm it with yours before relying on it.
- The deduction is a deferral, not a forgiveness: a traditional contribution is taxed on withdrawal.
How should estimated taxes be handled when income is uneven?
Trading income rarely arrives in four equal parts, which is where a fourth-quarter surprise comes from. The usual safe harbours are paying at least 90% of the current year’s tax or 100% of the prior year’s (110% where prior-year adjusted gross income exceeded $150,000). A trader whose gains are concentrated late in the year may also be able to use the annualised income installment method on Form 2210, which measures the required payment against when income was actually earned. The fourth instalment for 2026 is due 15 January 2027; the full mechanics, with a worked prop-firm example, are in our Q4 estimated tax guide. Self-employment tax is separate, and the Social Security portion stops at the 2026 wage base of $184,500.
Do prop-firm payouts follow the calendar year?
For a cash-basis taxpayer, payout income is generally recognised when it is received, so a payout that lands on 30 December and one that lands on 2 January fall in different years. That can matter for estimated tax and for which year’s deductions it is matched against. It is not a reason to hold back income — a payout that is available to you on a given date is generally treated as received on it — but it is worth knowing which side of the line a large request will fall on. The prop firm tax calculator models federal, self-employment and state tax on a payout figure, and prop firm taxes covers how the income is characterised.
What is the 15 March question for S-corporation planning?
A trader with trading-business or prop-payout income that is consistently strong may be weighing an S-corporation election. A Form 2553 filed by 15 March 2027 can make it effective from 1 January 2027. The arithmetic depends on a reasonable-salary requirement and on payroll costs, and the savings are bounded rather than automatic. See LLC vs S-Corp for traders, and note that where the income is trading gains rather than compensation, the structure interacts with §199A — covered on the qualified business income page.
What records are worth gathering before the year closes?
- Your broker’s year-to-date realised gain and loss report, and a list of every open position with its cost basis.
- A wash-sale check across all accounts, including any IRA, not just the one the sale was in.
- Complete exported history from every crypto exchange and wallet, including funding and transfers; exports are often row-capped and windowed.
- Every prop-firm payout statement, evaluation fee and reset fee, with dates.
- Receipts and in-service dates for any equipment purchased this year.
- Year-to-date estimated payments made, by date and amount.
How sure are we of each of these?
The calendar dates, the $3,000 cap, the wash-sale window and the §475(f) election mechanics are the settled parts; the election procedure in particular was checked against the IRS’s own procedural guidance elsewhere on this site. The 2026 dollar limits come from published inflation adjustments as reported by practitioner sources, and the OBBBA depreciation figures and the SECURE 2.0 solo-401(k) timing rule come from secondary sources that differ on detail. Treat every figure as one to confirm with your preparer before acting on it, and every one that could change your 2026 return as one to confirm before 31 December.
Year-end planning turns on facts a page cannot see: your status, your account types, your other income and what you have already paid. Several of these choices cannot be reversed once the year closes, which is why the useful conversation with a CPA who works with active traders is the one held in the next few weeks, not the one held in April.
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Frequently Asked Questions
What is the last day to sell for a 2026 tax loss?
For stock and securities the relevant date is generally the trade date, so a sale executed on or before Thursday 31 December 2026 falls in 2026 even though it settles after year-end. A wash-sale purchase of substantially identical securities between 1 December 2026 and 30 January 2027 can disallow the loss, so the first date outside the window is 31 January 2027.
How much capital loss can I deduct against other income?
A net capital loss can offset other income up to $3,000 a year ($1,500 if married filing separately). The remainder carries forward indefinitely. A valid Section 475(f) election is the usual route past the cap for the positions it covers, and net Section 1256 losses have a separate three-year carryback election on Form 6781.
When is the deadline to elect mark-to-market for 2027?
For an existing taxpayer, the Section 475(f) election for 2027 is due by the unextended due date of the 2026 return, which is Thursday 15 April 2027. The statement may be attached to the return or to the extension request, and filing an extension does not move the date. A new taxpayer elects by recording a statement in their books and records within two months and fifteen days of the start of the first tax year.
Do futures positions get taxed if I hold them past December 31?
Yes, in effect. Regulated futures are treated as sold at fair market value on the last business day of the year, so open gains are taxed and open losses deducted in that year whether or not the position was closed. That leaves little year-end timing available on this class of position.
Can I buy equipment for my trading business before year-end?
If you carry on a trade or business, expensing under Section 179 or bonus depreciation generally requires the asset to be placed in service by 31 December, so an item delivered in January does not help the 2026 return. The One Big Beautiful Bill Act raised the Section 179 cap to $2.5 million and made 100% bonus depreciation permanent for property acquired after 19 January 2025. An investor who is not in a trade or business generally cannot take the deduction.
How much can a self-employed trader contribute to a solo 401(k) for 2026?
The total annual-additions limit for 2026 is $72,000, with an employee deferral limit of $24,500 and an age-50 catch-up of $8,000. The contribution must be supported by earned income such as Schedule C self-employment income, and trading capital gains alone generally are not compensation. Under SECURE 2.0 a first-year sole-proprietor plan may be able to take that year's deferrals after year-end, but that rests on practitioner commentary and should be confirmed with the plan provider.
When is the fourth-quarter estimated tax payment due for 2026?
Friday 15 January 2027. The common safe harbours are 90% of the current year's tax or 100% of the prior year's, rising to 110% where prior-year adjusted gross income exceeded $150,000. Traders with uneven income may be able to use the annualised income installment method on Form 2210.
Does the wash-sale rule apply to crypto losses I harvest in December?
Not currently. Section 1091 applies to stock and securities, and digital assets are generally not treated as securities for that purpose; the One Big Beautiful Bill Act did not extend it. Extension has been proposed, most recently in H.R. 9172, but a bill is not law. That does not mean every sell-and-rebuy is respected, since transactions without substance beyond the tax result can attract other doctrines.