| Forex
Tax & Regulatory Treatment
We are the leading site for forex tax and regulatory content, and forex
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Forex refers to trading foreign currency contracts in the Interbank foreign-exchange
market. Most of our clients have retail off-exchange forex brokerage accounts.
You can also trade currency futures on futures exchanges and that tax
and regulatory treatment is significantly different. Be careful, most
professionals and IRS agents are not familiar with the forex rules.
Trader Tax Center: Forex
tax treatment.
Green’s
2011 Trader Tax Guide: Chapter 3 Tax Treatment.
- Forex accounting and tax reporting: Summary reporting is
used for forex traders and most brokers offer good online tax reports.
Forex brokers are not supposed to issue Form 1099s at tax time. There
are several nuances and complexities in forex accounting that you should
know about. For example, forex brokers handle rollover trades differently.
(We cover forex accounting issues in Green’s 2011 Trader Tax
Guide, Chapter 4 Accounting Gains and Losses.)
Website section: Forex
Tax & Regulatory Treatment
Blog articles: Forex
Tax & Regulatory Treatment
Forex Tax:
Sep 20
11 - Iraqi Dinar Investing Does Not Trigger IRS Personal-Use Rules
Jul 25
11 - Iraqi dinar revaluation: Real consequences or just rumors?
Jul 12
11 - Are lower 60/40 tax rates on futures in jeopardy?
Jun 02
11 - Foreign Bank Account Report (FBAR) problems
Jan 29
11 - Spot forex update
Nov 11
10 - Forex tax update
Forex Regulation:
Oct 30
10 - Is U.S. forex trading safe?
Oct 01
10 - U.S. forex traders have 270 extra days to trade with foreign
banks
Sep 23
10 - Offshore retail forex trading accounts are being forced back
to the U.S.
Sep 01
10 - Can American off-exchange retail forex traders evade strict new
CFTC rules by trading on offshore platforms?
Aug 31
10 - New CFTC forex trading rules call for 50:1 leverage
Aug 10
10 - U.S. forex traders may not be able to skirt rules by moving accounts
offshore
Aug 07
10 - Dodd-Frank bill seeks to crack down on forex arena
Webinars: Forex Tax & Regulations. Click
here.
- Forex tax & regulation update
March 10, 2011.
Click here to learn more and
for our free recording.
- Forex tax treatment
March 1, 2011.
Click here to learn more and for our free recording.
What’s next?
There are many nuances and uncertainties when it comes to forex. For many
forex traders, there are considerable tax dollars at stake, whether it’s
deducting a huge ordinary tax loss without a capital loss limitation,
or taking advantage of the lower 60/40 futures tax rates under certain
limited conditions. Many forex traders want to be sure they are using
complicated forex tax laws correctly, and to their maximum advantage,
so they chose to consult with us about it.
We recommend a 30-minute phone consultation
with Robert A. Green, CPA, or our tax attorney Mark Feldman JD. Mr. Feldman
can also provide a tax opinion. Read "Spot
forex update" and scroll down to “Will a substantial authority
opinion letter help?”
Business treatment: Many forex traders qualify for trader
tax status, so they can also benefit from business treatment, entities
and our other tax strategies. As pointed out in Green’s 2011
Trader Tax Guide (Chapter 1), many forex traders’ account sizes
are too small in the eyes of the IRS – mini retail forex accounts
– and they will have a hard time qualifying. Many forex traders
also have full-time jobs, and it’s hard for the IRS to believe their
nighttime trading hours. If you do qualify for trader tax status, consider
an entity.
Income
tax preparation: Forex traders with significant trading gains
taxed with lower 60/40 tax rates or large ordinary losses often prefer
to have our CPA firm prepare their annual income tax returns. Local accountants
usually don’t know all the forex nuances and complexities, and forex
traders seek correct handling with peace of mind.
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