Green Trader Tax - Page 3 - DailyFX Forex Forum

phloid · #31 (**permalink**) 03-27-2007, 02:08 PM

thank you!

edw_c · #32 (**permalink**) 03-27-2007, 06:36 PM

But, isn't it true the instruction for for form 6781 said that you have to attach a separate list for contract covered by the election (out of 988)?

And my TaxCut software actually has an extra check box for forex contract election (out of 988) at the beginning of the form and stated that you can not e-file if you check that box, and I wonder whether that is because of the attachment

GreenTrader Tax · #33 (**permalink**) 04-03-2007, 07:51 PM

I need to know the number of round trip trades, not contracts.

If you traded every day all day, even with another job, you can still qualify for trader tax status.

See my latest articles on the subject in Active Trader and Fidelity. Go to our home page.

Or my book The Tax Guide for Traders, chapter one is on trader tax status.

annab · #34 (**permalink**) 04-16-2007, 03:53 PM

I've entered my spot forex loss on Line 21 of 1040. Do I still need to fill out Schedule D?

GreenTrader Tax · #35 (**permalink**) 05-02-2007, 04:07 PM

Sorry for the delay.

The number of trades is a key factor, not the number of contracts.

If a taxpayer trades every day all day with day trades they can qualify as a part-time business trader even with another job.

I can't give advice on this forum, so I suggest you consider a consultation with me. See our site.

sicalis · #36 (**permalink**) 05-11-2007, 09:25 AM

Quote:

Originally Posted by GreenTrader Tax

sorry, can't comment on UK taxation.

good morning. I am new in this. I am foreigner. I live in South America. I would like to know if under that status I must pay US Income tax. If not, should I fill W8 form when opening my acct ?

Tks

Sicalis

GreenTrader Tax · #37 (**permalink**) 05-22-2007, 02:38 PM

Non-resident aliens of the US - who are not in the US - do not pay US income tax on forex trading gains or interest income.

They are asked to fill out a W-8 BEN to show they are non-resident aliens.

pedersen.forex · #38 (**permalink**) 06-11-2007, 02:46 PM

hello,
i'm starting an llc with a partner and we're trading the same account. what kind of schedule exsists for paying federal taxes. E.g- do we typically have to pay on a quarterly basis or annual? I've heard different opinions on the matter. thanks

4xjunkie · #39 (**permalink**) 06-15-2007, 11:30 PM

Hello, Mr. Green. I wish I could find this forum earlier.

Anyway, I had a huge loss from my forex trading in 2005 and have carried over to 2006 then 2007 because I reported it on Schedule D (I didn't know what to report forex trading at that time so just reported it as future trading). They are still a few ten thousand dollars amount left.

Is there any suggestion that I can report this as ordinal loss?

Thank you,

GreenTrader Tax · #40 (**permalink**) 06-16-2007, 03:43 AM

If you trade with another person in an LLC trading account, that LLC must file its own tax return, as a separate entity with its own tax id number.

Most LLCs elect to be taxed as a partnership;which files a Form 1065. Each partner receives a Schedule K-1 from the partnership, showing their share of gains and losses - with the charachter of the underlying income passed to the partner.

The partnership does not pay federal taxes and the partners pay all taxes on their own tax returns.

GreenTrader Tax · #41 (**permalink**) 06-16-2007, 03:45 AM

If you incorrectly reported your forex loss on Schedule D in a prior year and then carried over that capital loss to future years, you can consider amending the tax returns for all prior years involved. Providing the year is still open - it's three years from the original filing due date including extensions or 2 years from filing.

Just explain what happened in a clear and concise manner on the Form 1040X amended tax returns. Check your state amended tax return rules too.

4xjunkie · #42 (**permalink**) 06-16-2007, 10:52 AM

Thank you for your quick reply.

I absolutely consider to amend my tax return. Does your company support this kind of service too? In case IRS gets suspicious, maybe I should have a professional support.

As there is other things I want to ask, I might need to setup consultation.

Regards,

GreenTrader Tax · #43 (**permalink**) 06-30-2007, 08:39 AM

Part time trader tax status is allowed. But the qualification bar is raised in the eyes of the IRS, since they are more skeptical.

Learn more here http://www.greencompany.com/Educatio...PartTime.shtml.

It's not how many contracts that you trade, but the number of trades and other objective and subjective factors that count. You should have one or more trades per day, over 4 hours per day in the activity, the intention to run a business, average holding periods of days not weeks to months and other key factors.

Take my MoneyShow University course (no charge) here http://www.greencompany.com/Educatio...Seminars.shtml

Thanks.

4xjunkie · #44 (**permalink**) 07-02-2007, 10:56 PM

Thank you Mr.Green. I will take the course you informed. However to report sport FX loss or profit on 1040 line21 doesn't matter if I qualify trader status or not, does it?

I'm day-trading FX everyday now from evening to early in the morning, sometimes during work and it almost has 2 or 3 round trades at least but I didn't trade like that at that time, especially after I got that huge loss.

Anyhow, I really appreciate your trader oriented advice.

GreenTrader Tax · #45 (**permalink**) 07-17-2007, 11:23 AM

Business traders and investors both report Forex on line 21 of 1040, unless they elect out of IRC 988 and then report gains and losses like futures on Form 6781.

Qualifying for trader tax status delivers business treatment. That mostly comes into play by reporting your trading related expenses on Schedule C rather than on Schedule A as itemized deductions (with much less bang for your buck).

If you have negative taxable income for the year, only business traders can include a line 21 Forex loss in the Net Operating Loss (NOL) calculation. NOLs can be carried back or forward to significant tax refunds.

Conversely, investors with negative taxable income might waste their Forex ordinary losses. At least with the election out of 988, capital losses can be carried over to the following tax years.

We assess trader tax status in 30 minute consultations. http://www.greencompany.com/Traders/...nsulting.shtml

Regards.