Forex

Ordinary gains or losses in Section 988 or elect capital gains for a chance to use lower 60/40 rates in Section 1256(g) on major pairs

Forex receives ordinary gain or loss treatment and is not subject to the annual $3,000 capital loss limitation. (Section 988).

Investors and TTS traders can internally file a contemporaneous “capital gains election” to opt out of Section 988 into capital gain or loss treatment.

The capital gains election on forex allows the trader to use Section 1256(g) treatment with lower 60/40 capital gains rates on major currency pairs if the trader doesn’t take or make delivery of the underlying currency.

If you would like more information, you can see Green’sTraderTax Guide Chapter 3, Tax Treatment of Financial Products.

  • Capital Loss Carryovers
  • Securities
  • Section 1256 Contracts
  • Options
  • Exchange-Traded Funds (ETFs)
  • Forex
  • Cryptocurrencies & Digital Assets
  • Other Financial Products
  • Short Selling
  • Capital Loss Carryovers
  • Securities
  • Section 1256 Contracts
  • Options
  • Exchange-Traded Funds (ETFs)
  • Forex
  • Cryptocurrencies & Digital Assets
  • Other Financial Products
  • Short Selling
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