Tax Treatment On Financial Products

Which financial products you trade and where you trade them can make a huge difference in tax savings.

The tax treatment of financial products affects investors, traders, and hedge funds. Unfortunately, many taxpayers overlook the essential differences in tax treatment for these groups, leading to tax overpayments. Education is key. This chapter provides valuable guidance on how to treat various instruments during tax time. We cover U.S. and international equities, U.S. futures, and other Section 1256 contracts, options, ETFs, ETNs, forex, precious metals, foreign futures, cryptocurrencies, digital assets, and swap contracts.

It’s important to distinguish between securities and Section 1256 contracts with lower 60/40 capital gains rates and other financial products, such as forex or swaps, with ordinary income or loss treatment. Various elections can change tax treatment.

Click “Explore Tax Treatment On Financial Products” on a mobile device above. It is on a computer in the upper right corner. 

For more information, see Green’s Trader Tax Guide Chapter 3 Tax Treatment of Financial Products

Capital Loss CarryoversSecuritiesSection 1256 ContractsOptionsExchange-Traded Funds (ETFs)ForexCryptocurrencies & Digital AssetsOther Financial ProductsShort Selling
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