Tax Loss on Forex Trading
Tax Loss on Forex Trading
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forex trader · External communityPost link
External question — Personal Finance Stack Exchange
Author: forex trader
Original post: https://money.stackexchange.com/questions/13989
License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/
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In tax year 2011, I traded in a forex brokerage account in FXCM. I had trading losses. FXCM says that they do not report 1099 for US customers.
What is the proper way to report my forex trading losses and how should I document them for the IRS?
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ppetraki · External communityPost link
External answer — Personal Finance Stack Exchange
Author: ppetraki
Original post: https://money.stackexchange.com/a/14099
License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/
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http://www.forex-day-trading.com/fx-education/forex-taxes/
"Forex: Taxed as Futures or Cash?
Currency traders involved in the Forex spot (cash) market with a US brokerage firm, can choose to be taxed under the same tax rules as regular commodities [IRC (Internal Revenue Code) Section 1256 contracts] or under the special rules of IRC Section 988 (Treatment of Certain Foreign Currency Transactions). IRC 988 applies to cash Forex unless the trader elects to opt out."
From the sounds of this, you appear to have some more homework to do. Man, your question just made options look easy ;). Good luck!
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theproxy · External communityPost link
External answer — Personal Finance Stack Exchange
Author: theproxy
Original post: https://money.stackexchange.com/a/14224
License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/
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I ended up printing out my Annual end of year statement and giving them to my tax preparer. I took the losses as capital gains losses spread out over a few years and they attached the statement to my filing. I believe some others took the whole loss as ordinary loss, and again had the annual statement used as the supporting document for that.
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Quoted from Forex.com.bd-Editorial External answer — Personal Finance Stack Exchange Author: ppetraki Source score (net votes, not local likes): 1 Original post: https://money.stackexchange.com/a/14099 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. http://www.forex-day-trading.com/fx-education/forex-taxes/ "Forex: Taxed as Futures or Cash? Currency traders involved in the Forex spot (cash) market with a US brokerage firm, can choose to be taxed under the same tax rules as regular commodities [IRC (Internal Revenue Code) Section 1256 contracts] or under the special rules of IRC Section 988 (Treatment of Certain Foreign Currency Transactions). IRC 988 applies to cash Forex unless the trader elects to opt out." From the sounds of this, you appear to have some more homework to do. Man, your question just made options look easy ;). Good luck!
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