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  • #221
  • Aug 5, 2007 6:26pm Aug 5, 2007 6:26pm
I have been using UK spread betting companies up until now which has been tax free but as I have become more and more profitable they have become more and more unreliable.

Hi angiegiles, could you clarify this, I use spread betting firms in the UK, in what way do they become more unreliable, as far as I understand they don't care how profitable you become, they are just interested in the spread which is their profit.
  • #222
  • Aug 6, 2007 8:54am Aug 6, 2007 8:54am
Thanks for replying MPP and angielgiles00 - please post anything interesting that you find out and I will do the same.

Quoting scorpion
I have been using UK spread betting companies up until now which has been tax free but as I have become more and more profitable they have become more and more unreliable.

Hi angiegiles, could you clarify this, I use spread betting firms in the UK, in what way do they become more unreliable, as far as I understand they don't care how profitable you become, they are just interested in the spread which is their profit.
Scorpion - I may be wrong but I believe that spread betting brokers do not always pass your bet onto the interbank market - I think most of the time the spread betting broker is the counterparty to your trade so if you win, they lose (and vice versa!). They do not like losing and will try various tactics to put the odds back in their favour. If you trade around volatile times you will notice these tactics all the more.
  • #223
  • Aug 23, 2007 3:32pm Aug 23, 2007 3:32pm
Quoting WHTenn
A BIG advantage... but set up a LLC with a partner and use a Nevada Corporation for privacy reasons. You don't have to reside in Nevada to incorporate in Nevada.

Also, elect Trader 1256 Status for tax purposes. There are several posts on this subject by using the search feature on the left border.

Good Luck
What if you set up LLC without a partner? Are there disadvantages?
  • #224
  • Aug 28, 2007 2:41pm Aug 28, 2007 2:41pm
Can you describe what kind of tactics you have noticed ? A bit more detail about your experience would be greatly appreciated.
  • #225
  • Aug 28, 2007 3:00pm Aug 28, 2007 3:00pm
Quoting fxdm1
Thanks for replying MPP and angielgiles00 - please post anything interesting that you find out and I will do the same.



Scorpion - I may be wrong but I believe that spread betting brokers do not always pass your bet onto the interbank market - I think most of the time the spread betting broker is the counterparty to your trade so if you win, they lose (and vice versa!). They do not like losing and will try various tactics to put the odds back in their favour. If you trade around volatile times you will notice these tactics all the more.
I find quite often it is difficult to get a good price for entries and exits. Even in times of normal market movement, the spread on Cable can widen as much as 10 pips, the diff between bid and ask can be 3 pips, and a lot of times the price parameter can be as much as 10 or 12 pips where you cannot enter a trade if you get my drift....hope this makes sense, if not I will post an example the next time I make a trade.

I have posed the question of tax to an accountant on forex trading via a broker, and he will get back to me soon, and I will post the answer....if not, I will ask HMRC the question ..
  • #226
  • Aug 29, 2007 3:45am Aug 29, 2007 3:45am
joaocosta - I do a lot a lot of scalping the GBP/USD. You need quick execution when you trade the way I do. When you first open a new spread betting broker you seem to get the quick execution until they realise that you are profitable and then they requote you on the price you click or say that the market has moved since you clicked, even if it hasn't! Very frustrating.
  • #227
  • Aug 29, 2007 4:19am Aug 29, 2007 4:19am
fxdm1, can you name and shame please.

Would like to steer clear of brokers that widen spread on a per individual account basis.
If it's too good to be true, it probably is.
  • #228
  • Aug 30, 2007 3:39am Aug 30, 2007 3:39am
Simon - The Spread Betting brokers that I have used don't generally widen spread but take anything up to 1 minute to fill your order. By that time the price has moved and you are requoted. This can be frustrating when getting into a trade but even more when you are trying to exit for a profit, which eventually turns into a loss because of the delay.

I have used several brokers, all of which I have had trouble with. I don't blame them for these tactics - they have to make money as well but it is time for me to move on to a proper broker. I am currently deciding between MBT, Interactive Brokers and Dukascopy.

The companies I have used are Capital Spreads, City Index, CMC Spreadbet, Finspreads, IG Index and Worldspreads, all of which are no good for me.
  • #229
  • Aug 30, 2007 5:08am Aug 30, 2007 5:08am
Quoting fxdm1
...move on to a proper broker. I am currently deciding between MBT, Interactive Brokers and Dukascopy...
Have you looked at Oanda? I just moved there and am loving it. It would be interesting to compare them to different brokers.
  • #230
  • Aug 30, 2007 5:20am Aug 30, 2007 5:20am
The companies I have used are Capital Spreads, City Index, CMC Spreadbet, Finspreads, IG Index and Worldspreads, all of which are no good for me.[/quote]

Hi FXDM,

I too will be looking for a new broker, but will have to get my capital up a bit. I am using Capital & CMC(although inactive) & Capitalspreads seem to take ages to fill if volatile & their system often goes down, as in having to call them, but at times when you want to take profits. Do you or did you find that? Now that is frustrating.

If you have any luck on which broker you go with, can you tell me.

Cheers

Scott
Le singe est dans l'arbre
  • #231
  • Aug 30, 2007 6:11am Aug 30, 2007 6:11am
I'm in the UK and I often trade carry trades. I use a spread betting broker so there is not tax.
  • #232
  • Sep 9, 2007 9:35pm Sep 9, 2007 9:35pm
Quoting bond007
Hello everyone, is there a tax advantage if one is to set up a forex account in their business name? this would be a NYC corporation.

best regards
I would recommend www.simscpa.com as your accountant. Normal CPA's dont have a clue on how to properly set up and do the taxes for forex. This is a big deal and you may find a partnership is easier and better. That's what I have.
  • #233
  • Sep 11, 2007 1:25am Sep 11, 2007 1:25am
I would be interested to hear of how other Australians handle Tax issues. There is not a lot of info out there. Has anybody had any experience with Unit Trusts? They are a lot easier to setup and compliance costs are less the LLC.
"Any man who has $10,000 left when he dies is a failure." Errol Flynn.
  • #234
  • Sep 11, 2007 3:01am Sep 11, 2007 3:01am
Quoting aussieX
I would be interested to hear of how other Australians handle Tax issues. There is not a lot of info out there. Has anybody had any experience with Unit Trusts? They are a lot easier to setup and compliance costs are less the LLC.
My CPA says it is merely income tax but if I ever go professional I think I'll look around to see if there is anyone who specialises in this industry. My understanding is that any profit or loss, even if you don't withdraw if from your broker, is taxable as income. I made a loss on my first year, he asked me to demonstrate that it wasn't a hobby by docuementing how many hours per week I spent and the volume of trades in transaction and dollar amounts.

Personally I think it stinks that I get taxed even if I don't have the money in my bank. I have no problem being taxed on money I withdraw from my broker... oh well I guess that's life.
  • #235
  • Sep 12, 2007 3:31pm Sep 12, 2007 3:31pm
Quoting charlinks
What if you set up LLC without a partner? Are there disadvantages?
Check out this link and contact this group for your questions.

http://www.simscpa.com/news_detail.aspx?news_id=9
  • #236
  • Sep 12, 2007 6:10pm Sep 12, 2007 6:10pm
A different spin on tax...fun stuff
http://www.constitutionalincome.com/
Welcome to My World!!!
http://www.barefootsworld.net/
  • #237
  • Sep 12, 2007 6:36pm Sep 12, 2007 6:36pm
Quoting Marrethiel
My CPA says it is merely income tax but if I ever go professional I think I'll look around to see if there is anyone who specialises in this industry. My understanding is that any profit or loss, even if you don't withdraw if from your broker, is taxable as income. I made a loss on my first year, he asked me to demonstrate that it wasn't a hobby by docuementing how many hours per week I spent and the volume of trades in transaction and dollar amounts.

Personally I think it stinks that I get taxed even if I don't have the money in my bank. I have no problem being taxed on money I withdraw from my broker... oh well I guess that's life.
Here is why you want a pro CPA like www.simscpa.com . Set up a partnership business and you are taxed as 60% of gains at 15% capital gains rate and 40% at ordinary income. Think about it. At any income level that is a 24% tax rate. Can't be beat. Only thing better is first funding your Roth IRA for 10 years ($4000 x 10 years = $40k). Ten years from now you will be a better trader than you are now. Then and only then start trading inside the Roth IRA. That's my plan. At 60 I will have 100% tax free retirement income. Forex is the best if you have the knowledge.



I keep on fighting for the things I want; Though I know that when you’ve dead you can’t; But I’d rather be a free man in my grave; than living as a puppet or a slave; So as sure as the sun will shine; I’m going to get my share of what is mine….. Jimmy Cliff
  • #238
  • Sep 12, 2007 7:08pm Sep 12, 2007 7:08pm
Quoting pip pirate 2
Here is why you want a pro CPA like www.simscpa.com....
I'm in Australia, so I'll have to find a similar company when I go full time or start earning significant amounts. I might even contact these guys to see if they can recommend an Australian firm.
  • #239
  • Sep 12, 2007 9:25pm Sep 12, 2007 9:25pm
Quoting pip pirate 2
Here is why you want a pro CPA like www.simscpa.com . Set up a partnership business and you are taxed as 60% of gains at 15% capital gains rate and 40% at ordinary income. Think about it. At any income level that is a 24% tax rate.

Actually 23%
  • #240
  • Oct 24, 2007 8:18pm Oct 24, 2007 8:18pm
How is Forex income from trading reported to the IRS?

I know you will get an income statement from your broker at the end of the year.

If you make gains on your trading, is it taxed at an "income rate" or is it considered "capital gains"?

I know if you sell stock you hold for less than a year, you get taxed at a short term capital rate, so the tax rate is 30 or 38%. If you sell stock you have held for longer than a year, the tax rate is currently 15%. You can also sell stock you are down on, and show up to $3,000 a year for a tax write off.

How does Forex tax rates compare?
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