The mark-to-market rule allows traders to account for their securities at fair market value, impacting how gains and losses are reported for tax purposes. With more and more developing countries putting emphasis on the financial sector, it is necessary that they consider when and how to adopt the mark-to-market rule, and how to face the challenges raised by the mark-to-market rule to cross-border taxation. The precondition to adopt the mark-to-market rule is a fairly well-developed financial market in a jurisdiction. Some jurisdictions adopt the mark-to-market rule to combat tax deferral, others adopt it to harmonize tax law with accounting standards. In terms of implementation, jurisdictions aiming to curb tax deferral should focus on financial instruments most susceptible to such risks, while those seeking alignment with accounting standards should concentrate on defining and managing exceptions. For cross-border transactions, it is sensible for the residence jurisdictions adopting the mark-to-market rule to give taxpayers a refund under the credit method. Finally, under the tax equity principle, source jurisdictions could apply the mark-to-market rule to non-residents.