As a trader (including day traders), you report all of your transactions on Form 8949, Sales and Other Dispositions of Capital Assets. If you are in the business of buying and selling securities for your own account, you may also file a Federal Schedule C (Form 1040) Profit or Loss From Business to report any expense items.
There is no election that needs to be made for a Trader reporting sales on the Form 8949. You would report them on the Schedule D (Form 1040), Capital Gains and Losses and will be subject to the $3,000 capital loss limit. Some traders make what is called a "Mark-To-Market" election to deduct the full amount of the loss rather than $3,000 on your return. However, the election cannot be changed in the future without IRS permission. If the election is made, any gains in a future year are required to be reported as ordinary income not benefiting from the lower capital gains tax rates. Note that this election, if made, is not good until the following tax year.
If you have or ever do make the "Mark-To-Market" election, then each transaction is to be reported in Part II of the Federal Form 4797Sales of Business Property. If you are interested in making the Mark-To-Market election, you should review IRS Instructions for Schedule DCapital Gains and Losses, under the sections titled "Traders in Securities" on page D-5 and "Mark-To-Market Election for Traders" on page D-6.
As mentioned previously, you will need to complete Form 4797 and check the appropriate box on the form to report the transaction in Part II of Form 4797. To enter information to be reported on Form 4797, see the steps in the Form 4797 - Sale of Business Property Sale of Asset Entry into Program FAQ.
When entering Mark-to-Market transactions, you do not need to designate the type of property.
Note. TaxAct currently allows up to 40 transactions for Form 4797, Part II for e-filing. If you have more than 40 transactions, you can still use TaxAct to enter the data but would need to file a paper return. Enter a Sale of Business Property summary in the program with the description of "See Attached" and the totals. Attach a supporting document or spreadsheet to the return that would support all the transactions.