Currency Trading Tax & Regulatory Treatment: Update After The SNB Shockwave (Recording)
There are important differences between trading and deposit losses and an election you can file for lower tax rates on forex gains. Choose your currency product wisely for tax, regulatory and money-protection purposes.
Feb 10, 2015 at 4:15 pm EST
Join Green NFH CPA and forex tax expert Robert A. Green in this Webinar.
If you are one of many who got caught on the wrong side of the forex trade when the Swiss National Bank (SNB) surprised the markets with a huge policy change, you probably incurred significant losses. In this Webinar, Robert Green CPA explains how to handle these losses on your tax returns. He also explains how you can elect to use lower Section 1256(g) 60/40 tax rates on gains.
First, it’s important to segregate your losses into two camps: the forex trading loss (Section 988 or capital loss) incurred on your open positions that were liquidated or closed by you or your broker, versus losing a deposit in an insolvent financial institution (Section 165). The latter also happened to traders who made money on this market event.
Green discusses money safety issues for account holders with forex brokers and ways to avoid this risk using other currency instruments to trade. Like trading currency futures on futures exchanges, currency binary options on Nadex, and currency ETFs.
Many American forex traders disregarded CFTC rules (for retail off-exchange forex) by trading with non-registered offshore brokers offering leverage far above CFTC limits of 50:1 on major currencies and 20:1 on minor currencies. Several offshore brokers and a few U.S.-based forex brokers are facing financial strain or insolvency as a result of offering excess leverage to their customers during the SNB shockwave. Green discusses leverage and regulation. If you trade currencies in any form you should not miss this important Webinar recording.