Forex trading - how calculate capital gain tax in US?
Question:
Answer:
Forex traders receive a significant tax advantage over securities traders under Section 1256: reporting capital gains on IRS Form 6781 (Gains and Losses from Section 1256 Contracts and Straddles) allows you to split your capital gains on Schedule D, with 60%
taxed at the lower long-term capital gains rate (currently 15%) and 40% at the ordinary or short-term capital gains rate of up to 35%. That combined rate of 23% amounts to a 12% advantage over the ordinary (or short-term) rate.
Tax reporting for Forex traders can be rather complicated. Even the IRS does not yet have a clear process. It is best to contact a tax expert who specializes in Forex issues. You might want to check out www.Greencompany.com
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