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Attachments: NFA - "No more Limit or Stop Loss orders"
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NFA - "No more Limit or Stop Loss orders"

Is it likely that FSA will follow NFA in the near future?
Quoting fx-Junior
Is it likely that FSA will follow NFA in the near future?
Unlikely, if brokers thought the same thing was going to happen there, why the efforts to move clients to UK???
Jason, and others,

I posted the following questions a few days back but am hoping for more responses.

----------
Does anyone know what the tax consequences are if a U.S. citizen opens up a U.K. FX account?

Would I have to pay U.K. taxes, or file any U.K. tax forms?
Would I just pay regular U.S. taxes the same as with a U.S. broker?
Would I get the appropriate forms from a U.K. broker that I would file with my U.S. return?
Does having an off-shore account increase the probability to be audited?
Does it complicate the filing of U.S. taxes (or state taxes) in any way?

I'd like to know these answers before jumping to the conclusion that an offshore Forex account is going to make my life any easier...

Thanks in advance for any comments.
Pips4life
-------------

This is the one response so far... (Thanks sergej_2).
Quoting sergej_2
using foreign brokers....
if at anytime during a calender year your account balance is greater than US$ 10,000 you will need to file a TD F 90-22.1 form "report of foreign bank and financia accounts"..... by June 30 the following year....notifying the US Treasury of it's existence.......to avoid potential criminal liability....
Does anyone know what the tax consequences are if a U.S. citizen opens up a U.K. FX account?

None, you just pay tax on your income as per normal.

Would I have to pay U.K. taxes, or file any U.K. tax forms?

No, you may need to fill out an exemption form, that I am not sure of. You will not have to pay double tax (UK and US).

Would I just pay regular U.S. taxes the same as with a U.S. broker?

Yes

Would I get the appropriate forms from a U.K. broker that I would file with my U.S. return?

A statement should be ample

Does having an off-shore account increase the probability to be audited?

No, you have nothing to worry about anyway unless you're laundering money, right?

Does it complicate the filing of U.S. taxes (or state taxes) in any way?

No, your accountant will take care of this, just means different forms must be submitted to the irs

Someone who is from the US may be able to answer in more detail.
Quoting nondisclosure00
Ok, I'm w/ IBFX. I only open one postion on a pair at a time. I don't open another position on that pair until the first one has closed.

Does this mean that ANY position I open, I won't be able to put in Stop Loss and Take Profit targets?
I got an answer from IBFX, and here it is:
"Thanks for contacting IBFX. Some brokers may be completely removing stop losses and take profits due to this new rule, but IBFX will not be doing this. You will still be able to use Stop Losses and Take Profits on all orders, UNLESS you place multiple orders on the SAME currency pair for the SAME lot size. Then, you would be able to place a S/L or T/P on the first order, due to the First In, First Out rule. To get around this all you need to do is alter the lot size of all your trades on the same currency pair. Then, you should be able to close them in any order you like."
Quoting fx-Junior
Is it likely that FSA will follow NFA in the near future?
uh oh... i hope not. It's quite a headache already with upcoming new rules.
Quoting nondisclosure00
...Some brokers may be completely removing stop losses and take profits ...
Baloney, any broker who does this will go out of business by the end of the day it's implemented.

It just means you have to set separate orders for stop and take profit levels (3 orders instead of one).

Stocks/CFD's have been like this for as long as I have been trading, so it's nothing new. Just a bit less convenient.
I don't think any broker will give you tax advice, other than to say that they will not file any document with the govt. if that is their practice, for spot forex transactions, some do and some don't, regarding your trades, which is a 1099-B, for bartering transactions, and that it's up to you to comply with tax requirements not them. FXCM US does not file a 1099-B, not sure if it is the same in UK. Alpari US does file a form 1099-B with the IRS reporting bartering transactions, not sure what Alpari UK does. All brokers will tell you it is up to you to obtain tax advice by contacting a tax professional.

Jason most likely can confirm whether or not something similar to 1099-B is filed in UK accounts, and with who filed if filed, but I doubt that he will say much more than that.

Quoting pips4life
Jason, and others,

I posted the following questions a few days back but am hoping for more responses.

----------
Does anyone know what the tax consequences are if a U.S. citizen opens up a U.K. FX account?

Would I have to pay U.K. taxes, or file any U.K. tax forms?
Would I just pay regular U.S. taxes the same as with a U.S. broker?
Would I get the appropriate forms from a U.K. broker that I would file with my U.S. return?
Does having an off-shore account increase the probability to be audited?
Does it complicate the filing of U.S. taxes (or...
OCO, but they still need software or backend changes to implement that.

Quoting TwoBuckChuck
Baloney, any broker who does this will go out of business by the end of the day it's implemented.

It just means you have to set separate orders for stop and take profit levels (3 orders instead of one).

Stocks/CFD's have been like this for as long as I have been trading, so it's nothing new. Just a bit less convenient.
Quoting wwwin
OCO, but they still need software or backend changes to implement that.
Sure, to be expected.
Quoting wwwin
Unlikely, if brokers thought the same thing was going to happen there, why the efforts to move clients to UK???
Are you for real?
Just FYI, Darling has given some new power to the FSA to overhaul financial regulations...so I wouldn't be surprised if the insanity has spread across the pond...
FSA can have new power, that does not mean that it has to use it foolishly. It may just have gotten new power to overhaul it away from the US model, that put egg on their face. LOL.
http://www.forexfactory.com/showpost...&postcount=118
"London fought like anything a while ago to avoid LSE from being taken over by NYSE for that very reason. The cumbersome US regulations and the tendency for US to constipate the mkts with more and more reg. visa vis Sarbanes Oxely, etc."

And besides, both of us are speculating, so either we are both for real or neither one is.
P.S. I see that FXclub does not want to let you withdraw funds..
And if the insanity has spread across the pond, why are you running to UK?
http://www.forexfactory.com/showpost...4&postcount=66
You are the only person in the world that can't send in 10k orders thru FXCM.



Quoting pqt
Are you for real?
Just FYI, Darling has given some new power to the FSA to overhaul financial regulations...so I wouldn't be surprised if the insanity has spread across the pond...
here is a nice explanation about the new SL rule

http://www.fxsolutions.com/notice/fifo.asp
Yeah, that is the way the NFA intended for the rule to be implemted, which is different than what IBFX plans to do. What IBFX plans to do literally complies with FIFO rule as enacted, but in reality defeats the spirit of what NFA wanted.

Quoting Jnita
here is a nice explanation about the new SL rule

http://www.fxsolutions.com/notice/fifo.asp
Everyone has an opinion, mine is that this is one of the first steps to get this market in line with the stock market in the US for IRS reporting procedures. Easier for them to understand, a mess for everyone who has to file. Lazy accountants will hate, the industrious accountant will love it.

Anyone who as day traded stocks and then had to send the paperwork to the IRS at tax time knows what I am referring to. It should help the post office too, lol, that is a lot of paper work to send through the mail.

I would like to think it wouldn't come to that for forex, but if it comes to that and you have to account for every trade to the IRS, I guarantee you will rethink your trading strategy, or lack of one.
Redefining Reality
Yes, I have thought of that too. What a mess come tax time, if each trade has to be itemized.
If that is the purpose and UK is on list of tax heavens if you do not reside there, http://www.zyra.org.uk/taxhaven.htm , why would they bother with it....they have bigger problems to tackle.


Quoting piptechnician
Everyone has an opinion, mine is that this is one of the first steps to get this market in line with the stock market in the US for IRS reporting procedures. Easier for them to understand, a mess for everyone who has to file. Lazy accountants will hate, the industrious accountant will love it.

Anyone who as day traded stocks and then had to send the paperwork to the IRS at tax time knows what I am referring to. It should help the post office too, lol, that is a lot of paper work to send through the mail.

I would like to think it wouldn't come...
Quoting wwwin
I don't think any broker will give you tax advice, other than to say that they will not file any document with the govt. if that is their practice, for spot forex transactions, some do and some don't, regarding your trades, which is a 1099-B, for bartering transactions, and that it's up to you to comply with tax requirements not them. FXCM US does not file a 1099-B, not sure if it is the same in UK. Alpari US does file a form 1099-B with the IRS reporting bartering transactions, not sure what Alpari UK does. All brokers will tell you...
It sounds like you've heard my response before about not being able to give tax advice .

FXCM UK follows the same tax policy as FXCM US, no documents are sent out end of year. And you're right, some brokers do send tax documents at the end of the year and some don't, so please don't automatically apply FXCM's policy to your broker. Make sure to double check.

The closest thing I have found to tax advice for US residents trading with an overseas broker is this http://www.greencompany.com/Educatio...lTraderTax.pdf .

-Jason
Thanks for the PDF, it answers some questions.

Quoting Jason Rogers
It sounds like you've heard my response before about not being able to give tax advice .

FXCM UK follows the same tax policy as FXCM US, no documents are sent out end of year. And you're right, some brokers do send tax documents at the end of the year and some don't, so please don't automatically apply FXCM's policy to your broker. Make sure to double check.

The closest thing I have found to tax advice for US residents trading with an overseas broker is this http://www.greencompany.com/Educatio...lTraderTax.pdf ....
I checked with my London based broker today about subject and he assured me that the FSA will NOT follow any rules or guidances set by the NFA.
Anyways, if I would have a US broker I would definately "move" to London.
It seems the US admin is thinking about taxing intraday profits as well. I read talks about upto 80%. It won't get that far but I am sure some tax structure is in the making. Btw if you consider moving account and you consider yourself a pro with an account of at least $ 50.000 pm me as I might know a great solution for you.

Regards
{Promotion Removed}
If I were an American (and I am) I would be less worried about the IRS and more worried that the 10 million unemployed(and growing) that will NOT be making any significant Tax contribution to this country. In fact, those 10 million will need extra unemployment benefits just to feed their families-for every new job opening, there are 6 unemployed workers ready to fill them. USA has no jobs! We are not going to get new jobs this year or all of next as well. The situation as far as I can tell, has gotten worse and is still sliding south. California(where I live) is racing toward civil meltdown. Our state now has "junk Bond status"(poor credit risk) and no money for schools-police-fire-childhealthcare-and the list goes on... and record unemployment/deficit with shrinking revenue. My only real fear is for my kids(1000 rnds of ammo seems insignificant compared to the amount of morons living here). Who killed this country?
FF = Forex Faggots
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