still capital gain/loss or ordinary income

Discussion in 'Index Futures' started by trader_david, Feb 27, 2009.

  1. if you trade future, for example, ES/YM/NQ, or crude CL. if you gained, still it is catergorized as capital gain/loss like stock investment/trading gain? or you can treat it as ordinary income, you may be able to put gains to retirement account and accept social security credit?

    really appreciate your answers
  2. set up a trading company , pay yourself a salary and then you can contribute from your salary
  3. is that the only way you can do?

    if you set a trading company, then whatever(future/option/stocks) you trade, teh gain/loss will be business gain/loss?

  4. You are a rare one, someone looking to volunteer to pay more taxes. One of the distinct benefits of being a trader is not having to pay the FICA tax.

    If you really want to pay the FICA tax then buy or lease a seat on any futures exchange. Futures exchange members are subject to the FICA tax on their futures trading profits.
  5. DmanX

    DmanX Guest

    No, futures are taxed differently. Futures are considered 1256 contracts and are tax according to a 60/40 rule. 60% of the gain is taxed at long term capital gains rate, while 40% is taxed as short term capital gain or as ordinary income.

    You file form 6781 when you get your 1099 from your broker which only listed your gain for the year.

    Google 60/40 rule for 1256 contracts for a more detailed explanation.