Most spot traders are taxed according to IRC 988 contracts. These contracts are for foreign exchange transactions settled within two days, making them open to ordinary gains and losses as reported to the IRS. If you trade spot forex you will likely automatically be grouped in this category.

Mar 13, 2011 – Let's say that you have a $10,000 trading account and in past year, you made $1,000..uming that the STCG is at 40%, this means that you would have to pay $400 in taxes, and your take home net profit would be $600. Now, let's say that you elect to tax your gains under the Section 1256 provision and …

May 23, 2013 – Section 988 transactions, the default method of taxation for currency traders, treats the gains or losses from forex transactions as ordinary gains or ordinary losses. If you have forex gains, they are taxed as ordinary income, subject to which ever tax bracket you fall under.

Apr 23, 2014 – This means their gains and losses from foreign exchange, such as buying and selling of foreign goods, are treated as interest income or expense and get taxed accordingly. Consequently, they do not receive the beneficial 60/40 split. Currency traders are also exposed to daily exchange rate fluctuations so …

Foreign investors that are not residents or citizens of the United States of America do not have to pay any taxes on foreign exchange profits. We do not accept traders from the United States, … be Construed as Tax or Investment Advice of any kind. Make Sure that you Consult with a Tax Professional about your Forex taxes.