IB Forex Tax Question

Suppose during 2007 I purchased from my USD base currency account 100,000 Euro at a total cost (including commission) of $140,000. Later that same day I sell the 100,000 Euro for net proceeds of $141,000.

Question 1 - Where on the IB tax forms does this transaction show up?

Question 2 - Where on my tax return does this get reported? Is it on Schedule D as a short term capital gain like a comparable stock trade?

 

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I'm not a tax expert, but this is what I'm doing on my taxes.

1. cash forex transactions don't show up anywhere on IB's tax forms and they are not reported in any way to the IRS

2. I enter my gains/losses on Form 6781 Part I to gain 60/40 tax treatment. But I don't lump it with my normal futures gains. I put it in its own line, along with the phrase "“cash forex elected out of IRC 988, see spreadsheet.” I also attach a spreadsheet that lists every cash forex trade.

 

Thanks for comments. Sounds reasonable and you've fully disclosed everything.

 

Are there any short cuts to this method; it will take me days to do it this way. What about the pulling up an annual calender report and looking under cash report? Is there useful summarized data somewhere there? Looks like a mess to me. Is there any service, like Gains Keeper that can keep my taxes on trading coherent -- including FX trades that I have elected to treat as Sec. 1256? Help!