Schedule D Tax for Forex

Discussion in 'Forex' started by showtime23, Mar 29, 2004.

  1. Is there an easier way to fill out the schedule D for currency trading or do I have to fill out each buy/sell transaction that I made?

    thanks
     
  2. I believe that in most cases currency trades are treated like Section 1256 contracts for tax reporting purposes and the reporting is usually done on a total net profit basis (I believe they are reported on From 6871). They are also afforded special tax treatment.

    You should go to the IRS publications website and do a search for Section 1256 contracts and also look for Publication 550 for detail information.
     
  3. Does 1256 include spot market?

    Is their any tax break for trading forex spot or does that only apply to the futures?
     
  4. I am not a tax expert but I understand that it applies to both. However, I also believe that there can be some special circumstances regarding "spot" but in general Section 1256 includes any regulated futures contract, any foreign currency contract and I have received information in the past that it would also include foreign listed futures (in my case I trade TOPIX, HSI, DAX, etc.)