Forex Taxes

As an us american patriot i would pay taxes in my homeland - not even for the securitie !! But i didn`t find an universal law which managed that i must pay

America: Freedom to Fascism - Director's Authorized Version ...
http://video.google.com/videoplay?do...80303867390173

Perhaps could someone disabusing me ?

The capital tax rate is 23% for the US and it's not that bad. If I paid 36%, I would be disappointed.

Your poll question throws me off.. "do you pay taxes transferred back to you account?". Do you mean, do you pay taxes on your forex account?

Also, one should stipulate what country they are from when posting to prevent confusion.

I have to give away most of my profits to my country's dear leader. What's left over goes to my wife.

I keep my profits offshore where Mr Mubarak can't get none

HAHAHAHA

Trading usd/jpy and eur/usd pairs.
How are taxes treated with these pairs in the usa?
Cant find an answer on the irs website.
Its a wonder anyone can find anything.
LOL

Depends how you're trading and how you have things set up...

most likely it's going to classify as short term capital gains which i think is aorund 40% nowadays...

Move to Germany we only have to pay 25% flat tax on all capital gains.

Actually, it's 30% last time I checked.

You have two choices. You can either go with the Tax form 1099 route, or the Tax form 1256 route. They are both quite distinct and treat gains differently, so you really need to approach a qualified tax accountant about your pros or cons between the two. One other thing is that once you go one way, good luck on going down the other path if it turns out to be a wiser decision.

I’m trying to do my taxes here and I’m looking at my 1099-B and notice that 2008 wasn’t a real good year for me. I have losses for the year. Anyhow my question is, since I have losses do I need to even report them??? Is there any benefit to reporting my losses??? I understand I would have to report if I made gains for the year but that is not the case.


Thanks
Tom

You'll still want to report your losses for taxes so you can write them off next year after you've earned tons of money.

Or even for this year, to counter any other earnings or bank interest.

You can report some of this year's losses, and perhaps carry losses into future years. That means a deduction, so yea... by all means take it.

Don't quote me on this,

But as I understand US tax code, you can write off up to $3,000 in losses against your personal income.

i always thought that to write off losses it must be a stock investment.

does forex still count!?!?

If it's on a 1099 form, yes it counts. Now if you do futures and you use a 1256, that's slightly different.

Try this.....Tax is on menu at the left.



http://www.ibfxu.com/Courses/TAX/tax1010.aspx

Basically you can opt to take it as ordinary income or as blended capital gains. That option has some important ramifications later on tho, you might not be able to change it back.

Now, for instance if you treat it as capital gains... form 6781 specifies how the blend is done. 6781 is attached to schedule D, and schedule D goes into line 13 on the 1040 form. Assuming, of course, that you're not trading as a corporation or something. Schedule d (1040sd) allows you to take up to $3000 as a deduction against your income, and that deduction is carried into 1040 right beside your wages, tips, other gains, etc. In other words you can take up to a $3000 capital loss per year.

You can then "carry back" any of those losses into future years, but you can't have more than a $3000 loss total then either, so you could end up with losses for years as a deduction. The new "stimulus" bill changes the way some of those carry back provisions work, reading the text it looks like it alters the amounts you can carry and has some kind of "alternate carry back election" that you can do. Until that's all figured out by the IRS tho, we can't know for sure what that'll do.

Now this is where things get a little funky. If you opt for 1256 then your gains and losses are treated as capital gains. This gives you a blended amount as opposed to the full amount when figuring up your taxes. The blend is usually beneficial, but that will depend entirely on your tax bracket and your loss amount. If you opt for 988 treatment then your losses are treated as ordinary loss. Ordinary loss is reported (IIRC, do double check this tho) on line 14, thru form 4797. There are no loss restrictions there, so you can claim a bigger loss.

The problem with 988 is that if you do opt for 988 treatment, you might not be able to opt for 1256 treatment later on. The rules there are very murky, at best. But that means if you have had, or expect to have, a really good year next year... then you might get stuck paying taxes on forex at your income bracket rather than a capital gains rate.

I've always opted for 1256 where I could get it, but I've never had more than $3k capital loss either, so my situation may differ from yours.


No, spot forex is in a class all by itself. Altho current legislation seems to be putting it into the 1256 category along with exchange regulated futures. You can take pretty much any loss.

How will this Trader Tax law affect Forex?

http://www.rallycongress.com/no2tradertax/1536/

First off, I don't think it will affect spot Forex at all. If I'm not mistaken, it's for stocks, options, and futures only. Second, c'mon, it's only .25%, a quarter of a percent.

Nobody likes new taxes, but I hear traders all over the boards freaking out like it's the end of trading as we know it. People need to improvise, overcome, and adapt (to quote Clint Eastwood) and stop tripping over pennies on their way to dollars (to quote Wade Cook).

Smoke

Ya, we talked a bit about that. Last check, it was still in committee.

You can find it on Thomas.loc.gov by searching for "Let Wall Street Pay for Wall Street's Bailout Act of 2009"

Appears to have started w/ a 1 minute floor speech that ends with:

"We want our money back. It's time to impose a tiny transfer tax on all securities exchanges and derivatives on Wall Street to pay back the taxpayers for the still unfolding scandal."

It would not be a good thing to impose, but this guy sounds like just another clueless loudmouth. Small traders and people w/ self-directed IRAs are not "Wall Street" by any measure, and the real "Wall Street" that manages such funds professionally would have no qualms about passing that tax back down to us.

Such a tax would not tax "Wall Street" ... it would tax the millions of Americans that work hard and save for retirement. It's just continuing the same old war on the middle class.


They're regulating spot forex on several occasions now, it won't be long before it effects us too. And it's a .25% of the position, not a .25% of the profit. And that's on both the buy and the sell side. So it's .50% of the net trade. Leverage your trade, leverage your taxes.