Futures and year end tax reporting

Discussion in 'Index Futures' started by nasdaqmadness, Oct 12, 2003.

  1. I am just putting the wraps on my 2002 taxes and have a question. yes I know, its a bit late ... Is there a standard method for reporting futures trades relating to the multiplier and total futures value ? Example Lets say you open and close a trade on the ES. Buy at 1000. sell at 1002. Would that be reported as cost basis $1000. or (1000 x 50) = $50,000. I used Tradekeeper 2.5 ( the freelance software available on the Interactive Brokers website) to list my cost basis and P&L. It lists the cost basis as the larger full multiplier value. ($50,000). This obviously results in several million $ worth of futures trades for even the small time trader for the full year. It seems to me that it should be legal to list the smaller values like with options. A call contract worth 1.00 would only have a cost basis of $100. not the value of the stock it controls?
    Thanks for any help with this. I Just don't like those big $$ amts: :eek:
  2. Futures are usually under the category of 1256 contracts. The only thing you report is the total profit or loss in all 1256 contracts. You DO NOT break them down or show your trades. They are given 60 percent long term and 40 percent short term tax treatment. Use form 6781. Your brokerage firm sends you this figure at the end of each year.
  3. After playing with the Excel #s a bit it seems that it needs the larger amount or else it needs a multiplier (50) If i use the $1000. amt. it thinks I made $2.00 and not 2 Es points. How are other traders reporting their costs and sales values and what software do you use?
  4. I think marketman just said you don't have to report your actual trades; just your year-end P&L. Is that correct?

  5. Ebo


    Let us know how that EXCEL works out for you!
    ....................then just report the NET number to Uncle Sam.
  6. So for futures the IRS does not need to see every trade? They only need net gain and losses and total contracts for each future traded. Thats sound great to me . My CPA is not very knowledgeable in the area of futures trading.
  7. Ebo


    Hire a CPA that specializes in trader's tax then.
    Why risk an audit?...............especially since you already raised a flag filing a year late. A good CPA is worth his weight in gold.
  8. wrong. They do not want to see totals for each future traded. They only want the total profit or loss (ONE FIGURE) for all 1256 contracts. Your 1099 from your broker gives you this number.
  9. Not all futures are section 1256 contracts. Does anyone know how to report the ones that aren't, especially when the P/L is not in USD?
  10. Thanks market_man76 ...2002 was my first year trading futures and this is new to me. This trader tax thing sure adds adds to what is already a mess every April. Or October if you put it off like me. I spend more time screwing with my year end trading crap than I spend on my other accounting. But I usually wait until the year end to download my trades. I need to start doing this every month. Thanks all for any other advice in this area. Nas
    #10     Oct 12, 2003