forex and US tax filing: must I list every single trade or just one profit or loss am

Discussion in 'Forex' started by increasenow, Mar 7, 2009.

  1. forex and US tax filing: must I list every single trade or just one profit or loss amount?..I have heard so many views on this...if every trade..that would be 100's!!!!!...or is it like futures and one lump sum amount?...also note...you get not 1099 from a forex broker...or is it like stocks when you must list every trade...I think it is simply lisiting a forex lump sum profit amount and NOT having to list literally hundreds of forex trades and not even considering what is is trade is non USD like eur/jpy for example...please clarify...thanks...
     
  2. DaveN

    DaveN

  3. thanks DAve...help me here...okay:

    1-stocks and or options (equities): you must list every trade
    2-Futures: you do not list every trade, just a "lump sum"
    3-Forex: as you just mentioned, you do not list every trade, just a "lump sum"....

    why..do you have to list "every trade" if trading stocks or otpions (equities)...this puzzles me...thanks...
     
  4. DaveN

    DaveN

    Ahhh, tax law. I don't know enough to explain it, but I can speculate. I am neither an attorney nor CPA; I have no special insights or experience. The following is my opinion only:

    It seems to me that over the years, equities have been used as and considered to be the "investments" made by the retail public. Lawmakers and policymakers have seen the need to protect and regulate investors to eliminate fraud and deception, both against the government and against the investor. So you have an individual section, Schedule D, of the tax return which specifically treats this area.

    Since some of those protective laws address individual transactions, e.g. wash sales, and basis calculations, each transaction needs to be listed and is available for scrutiny. Generally, investors don't trade often, especially before electronic trading, so listing trades on a tax return wasn't especially onerous. Over the last decade, with the explosion of electronic trading, I cannot imagine what lengths of entries the IRS and tax professionals are seeing on Schedule D's.

    As you know, futures are short term contracts which expire, so by definition, they aren't likely an investment vehicle. So they get their own section of the tax code, 1256, which takes more of a business approach (lump sum reporting recognizes the short term nature of these vehicles).

    A similar argument can be applied to spot currency. Transactions are likely not an investment, but rather an exchange for a business purpose or speculation.

    Of course, there's always Mark-to-Market and Trader Status which you can consider for your equities trading.
     
  5. thanks Dave...really helps...I will confer with my CPA and get agreement to only list the lump sum profit for Spot Forex traded ins 2008...rather than the whole listing...I could not imagine if we had to list each and every single spot forex trade!!!...wowo..agree with you a simple "lump sum" amount is best..will confer with my CPAccountant...thanks!!!
     
  6. cool..thanks again!
     
  7. any new insight on this?...anyone?
     
  8. thought u were going to confer with your cpa, dont take advice here! I have paid taxes on fx, and its one lump sum. Ask your cpa like u said
     
  9. thanks...all I needed to know...
     
  10. Are you splitting this 60% long term and 40% short term like futures?
     
    #10     Mar 17, 2009