Money A2Z

As I fired up TurboTax and prepared to do my taxes this year, I found myself mystified about how to report forex gains and losses from the spot currency markets where I do my trading. So I went poking around online for free advice on how to handle my forex taxation conundrum or FTC, for short.

In short order, Google delivered me to an excellent article by Robert Green, CPA. In particular, this sentence cleared a few things up nice and quickly: Green goes on to discuss ways that forex futures traders can file their gains under Section of the IRS code to avoid paying at ordinary tax rates. Green notes that these rules could arguably be applied to the spot forex markets as well…which is where things get complicated.

Some further reading in an bill meridians planetary stock trading by Jim Forrester of Traders Fxnet forex peace army only succeeded in confirming that the simplest, least controversial way for a spot or cash forex trader to file forex taxes losses trades is as ordinary, short-term gains or losses.

So I decided to keep it simple and safe and go with ordinary tax rates all the way.

Foreign exchange gains and losses | Australian Taxation Office

But just to be sure, I went right to the source and called up the IRS. Report them as short-term gains.

How To File Taxes As A Forex Trader, Tax articles, Forex software

Pay taxes at the short-term gain rate. Describe them as gains from currency investments.

Forex taxes losses, I hope this rambling taxation narrative was helpful — or at least that those links Forex citibank provided to real tax advice are.

And now, please read the friendly disclaimer below.

forex gains and losses? - TurboTax Support

And then re-read it. This post is simply an informational article intended for educational purposes and does not constitute tax advice from a licensed tax preparer.

Be sure to consult an accountant or tax professional specializing in forex trading with any tax questions before reporting your trading gains or losses to the IRS.

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