My accountant refuses to do my taxes | Forex Factory

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My accountant refuses to do my taxes

  • #1
  • First Post: Oct 22, 2014 4:57pm Oct 22, 2014 4:57pm
Firstly, I know have read IRC 1256 and IRC 988 contracts to do taxes. Still I have a accountant who I want advise from.

I am with OANDA wanting to claim my net loss.
I bought over my yearly OANDA statement to show my accountant the net loss.
My accountant says IRS wont accept statement and needs a 1099b to prove my net loss.
I tell accountant OANDA doesn't provide that.
Accountant tells me to ask OANDA what they send to IRS to show my net loss and gains .
OANDA tells me they don't provide IRS with anything except a 1099int if I make over 10 dollars in interest.
Accountant claims if Oanda doesn't send IRS anything to show my net loss or gains, then I cant either, because IRS needs to match up the information from both brokerage and client.

What do I do? Thanks in advance
  • #2
  • Edited 7:27pm Oct 22, 2014 6:59pm | Edited 7:27pm
Not surprising as most of the local accountants are clueless when it comes to Forex Trading and taxes. Most Forex brokers don't report information to the IRS as they are not required to. You simply run a year end P/L from your broker's reporting tools. I suggest you find someone who specializes in taxes for active traders and in this day and age you don't have to use someone local. I use Green Trader and with over 30 years of doing taxes for traders these guys are very knowledgeable. Their web site is packed with info and the free webinars they put on are great.

These guys helped me establish a trading entity, did my taxes last year and I am happily going to use them again for next year. I will caveat that they are not cheap but if trading is a big part of your life and you are a full time trader I would give them a look. Good Luck!

http://www.greentradertax.com/
  • #3
  • Oct 22, 2014 8:02pm Oct 22, 2014 8:02pm
Quoting xxfunguyxx
Firstly, I know have read IRC 1256 and IRC 988 contracts to do taxes. Still I have a accountant who I want advise from. I am with OANDA wanting to claim my net loss. I bought over my yearly OANDA statement to show my accountant the net loss. My accountant says IRS wont accept statement and needs a 1099b to prove my net loss. I tell accountant OANDA doesn't provide that. Accountant tells me to ask OANDA what they send to IRS to show my net loss and gains . OANDA tells me they don't provide IRS with anything except a 1099int if I make over 10 dollars...
Forex accounting and tax reporting

Summary reporting is used for forex trades and most brokers offer good online tax reports. Spot forex brokers aren’t supposed to issue Form 1099-Bs at tax time. Section 988 is realized gain or loss, whereas with a capital gains election into Section 1256(g), mark-to-market (MTM) treatment should be used.

Section 988 transactions for investors are reported in summary form on line 21 of Form 1040 (“other income or loss”). Watch out for negative taxable income caused by forex losses without trader tax status; some of those losses may be wasted. (If you qualify for trader tax status, use Form 4797 Part II instead and the negative income will likely generate a NOL.) Section 1256(g) treatment uses Form 6781 just like other Section 1256 contracts.

There are several nuances and complexities in forex tax treatment, accounting and tax compliance that you should know about. For example, forex brokers handle rollover interest and trades differently. (We cover these issues and more in Green’s Trader Tax Guide.)
  • #4
  • Oct 22, 2014 8:31pm Oct 22, 2014 8:31pm
Quoting PoundTrader
{quote} Forex accounting and tax reporting Summary reporting is used for forex trades and most brokers offer good online tax reports. Spot forex brokers aren’t supposed to issue Form 1099-Bs at tax time. Section 988 is realized gain or loss, whereas with a capital gains election into Section 1256(g), mark-to-market (MTM) treatment should be used. Section 988 transactions for investors are reported in summary form on line 21 of Form 1040 (“other income or loss”). Watch out for negative taxable income caused by forex losses without trader tax status;...


I am looking to do Section 988. I guess my question, like my accountants, is what proof, if any, will the IRS want to show my ordinary loss claim? are the statements good enough?
  • #5
  • Oct 22, 2014 8:48pm Oct 22, 2014 8:48pm
Thanks guys for sharing this crucial information. I was just thinking about this!
It's time we stop entertaining ourselves and start realizing ourselves!
  • #6
  • Last Post: Dec 9, 2015 5:54pm Dec 9, 2015 5:54pm
Hi guys,

So for 2014 & 2015 I filed on 1099 forms so I'm assuming those were under irc 988. I want to elect out of irc 988 into irc 1256 for 2015 and have sent myself an internal memo. However, I have read that I need to notify the IRS of the change and get their approval beforehand. How do I go about notifying them? Is there an official form I need to fill out? Or can I just file 2015 under irc 1256 as if I never filed before under irc 988

Many thanks!
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