Can someone tell me what the tax consequences are of owning an Exchange Seat? When you sell them (and make a profit or loss) is that taxed as long term capital gains? Are the seats "mark to market" each year, and I assume you're taxed on any income you make from leasing them out? Anyone have some information? Thanks!
The main tax consequence of being a futures exchange member is being subject to FICA tax on futures trading profits.
1) If you want, you can report gains/losses from seat sales on your Schedule-D. You can use a letter from the exchange to verify your purchase price & date and sale price & date. Your holding period will determine if it's short-term or long-term. 2) Seats aren't marked-to-market at the end of the year as futures are. 3) If you want, you can report lease income. 4) The exchanges may not report seat sale info to the IRS. If you have a profit from a sale and don't report it, nothing may come of it.
A few more questions... does anyone know where they list the historical seat sales (like just a list of the past transactions, dates, sale, bids, offers, ect...)on the CME or CBOT website? Last time I talked to someone at the CBOT they said that information should be listed on their website, but I cant seem to find it....anyone have the link? Also, what's the deal with the COMEX FULL membership price (as listed on the NYMEX website)? I thought all those contracts are traded on ICE now? I'm assuming that seat price does not include the ICE shares you must own to become a member?
Current seat information for the CME is at http://www.cmegroup.com/company/membership/membership-pricing.html History of last 3 seat sales for the CBOT is at http://www.cmegroup.com/company/membership/membership-pricing-cbot.html I am not aware of any lists of historical CME or CBOT seat prices.
That CBOT link doesn't go to the proper page. After clicking the link http://www.cmegroup.com/company/membership/membership-pricing-cbot.html you have to select "CBOT Lease Prices" to see the last 3 seat sales for each CBOT seat type.