Five Ways To Deduct Losses In Financial Markets

24 Sep

Sep 24, 2015 at 1:00 pm EST

Join Managing Member Robert A. Green, CPA, to review his recent blog post Five Ways To Deduct Losses In Financial Markets. Mr. Green prepared a full tax return example file with many of the losses listed below, and he walks you through the nuances.

Five ways to maximize losses on tax returns

1. Elect Section 475 for unlimited ordinary losses vs. capital loss limitations on trading losses. There are many nuances and misconceptions about Section 475.

2. Net operating losses (NOLs) are comprised of Section 475 losses and trading business expenses. NOLs are carried back two tax years and/or forward 20 years, generating powerful tax refunds.

3. Wash-sale losses often cause phantom taxable income and tax liability. Learn how to avoid wash-sale loss problems.

4. Section 1256 loss carry back election. This is the only type of capital loss that can be carried back.

5. Forex losses are ordinary by default, and they offset wages and other income without limitation.

Mr. Green will also discuss losses in retirement plans.


Thanks for your advice and approach in handling our 2010 & 2011 court filing. Our MTM status was initially denied mid-2012. Going through IRS appeals processes lead us nowhere else but another refusal of MTM status. At that point I was not sure how to proceed and if the case was strong enough to take it to the tax court. I kept searching for a law/CPA firm who can [handle this] case. I did not find any lawyers locally with [MTM] experience ... Then I found the Green Trader Tax website, which exhibited a ton of experience and testimonials in this niche area of tax code. We had exactly eight working days to discuss, share data, decide an approach and file the petition to tax court ... you folks delivered well — on time and most importantly with positive results! Your overall approach and professionalism did not make me feel that I was working with someone remote. Also, Robert, even before we started you stressed that we evaluate our case against your golden rules for MTM first; which was a great litmus test that really boosted my confidence in moving forward ... So here we are, more than two years since the first audit; but with a decision in our favor. My sincere thanks to the Green LLC team. I will be happy to be a reference for your future clients.