EDUCATION CENTER
Tax Treatment: Securities, Futures, Forex, ETFs & More

There are complexities in sorting through different tax-treatment rules and tax rates. Section 1256 contracts have lower 60/40 tax rates, with 60% being a lower long-term capital gain even on day trades, and 40% being the short-term rate, which is the ordinary tax rate. At the maximum tax brackets for 2013 and 2014, the top Section 1256 contract tax rate is 28%, 12% lower than the top ordinary rate of 39.6%.

We cover many different trading instruments and how they’re treated come tax time. In addition to these trading vehicles, more traders are gaining access to swaps, derivatives and foreign exchanges. Tax treatment for these instruments is complex, and we covered this topic in detail on our blogs: Tax treatment for swaps, Tax treatment for Nadex binary options, Tax treatment for foreign futures and tax treatment for bitcoin.

Tax treatment is confusing
Is it ordinary or capital gain or loss treatment? Can you benefit from lower long-term capital gains rates on securities held over 12 months or on Section 1256 contracts with the 60/40 blended MTM rate? Do wash sale loss deferral rules apply? Do you report realized transactions only, or also unrealized transactions with mark-to-market accounting?

This is an excerpt from Green’s 2014 Trader Tax Guide

Copyright © 2014

Consider a 30-minute consultation with Robert A. Green, CPA or Darren Neuschwander, CPA, co-managing members of Green NFH, LLC.

     

Highlighted Recent Recordings:

*Entities & Employee-Benefit Plans
*Current Developments in Tax Law that Affect Traders
*Accounting for Traders
*The Section 1256 club is hard to get into: Futures on foreign exchanges often donít qualify
*Puerto Ricoís tax haven status
*Entities: A key update on trading entities and management companies
* 2013 Tax Filings For Traders & 2014 Tax Planning
*Forex Tax Treatment & Planning
*Trader Tax Law Update: Current Developments
*2014 Tax Planning & Will an Entity Help Lower Your Tax Bill?
*Audits of Performance Records

Trader Tax Center

Tax Newsletter & Calculators

Highlights (see the full archive):

Aug 19: Foreign partners in a U.S. trading partnership can be tax free Read More

Aug 13: IRS warns Section 475 traders Read More

June 20: Tax treatment for Nadex binary options Read More

June 19: IRS softens its stance for some taxpayers with undeclared offshore accounts Read More

June 12: IRA rollover rule changes Read More

June 6: Bitcoin is not reported on 2013 FBARs Read More

June 5: Tax deadlines in June: U.S. residents abroad and FBAR Read More

June 2: Tax treatment for foreign futures Read More

May 21: Bitcoin tax update: Can business traders apply Section 475 elections to bitcoin trades? Read More

May 13: Puerto Ricoís tax haven status is tailor made for investors, traders and investment managers Read More

May 6: Entities: A key update on trading entities and management companies Read More

Mar 25: IRS guidance on bitcoin transactions will chill its use Read More

Feb 27: Another trader tax court loss (Assaderaghi) Read More

Feb 1: Net investment tax details Read More

Dec 4: IRS final regulations for Net Investment Tax help traders. Read More

Dec 3: Bitcoin is a hot commodity, but is it taxed like commodities, assets, or currencies? Read More

Nov 15: Another non-business trader gets busted in tax court trying to cheat the IRS. Read More

Nov 6: Hedge fund investors depend on ďassuranceĒ from quality independent CPA firms. Read More

Oct 29: ObamaCare taxes are starting to affect traders. Read More

Aug 30: The Tax Court Was Right To Deny Endicott Trader Tax Status Read More

Aug 18: Common trader tax mistakes Read More

July 24: Learn the DOs and DONíTs of using IRAs and other retirement plans in trading activities and alternative investments Read More


GreenTrader blog archive, Forbes blog, Benzinga blog.

 




Bookmark and Share

Join our Email List to receive
our content and event invitations


education  |  traders  |  investment management  |  traders association  |  about us  |  blog
home  |  store  |  login  |  sitemap  |  contact us
Send mail to info@greencompany.com with questions or comments about this web site or click here
Copyright © 1996- Green & Company, Inc.   disclaimer  |  privacy