By default, retailFOREX traders fall under Section 988, which covers short-term foreign exchangecontracts like spot FOREX trades. Section 988 taxes FOREX gains and losses likeordinary income, which is at a higher rate than the capital gains tax for mostearners. An advantage of Section 988 treatment is that any amount of ordinaryincome can be deducted as a loss, where only $3,000 in capital gains losses canbe deducted. Section 988 gains or losses are reported on Form 6781.<\/p>\n
Yes, OANDA is a Forex and CFD broker and is regulated by Section 988 of the internal Revenue code. You would report your foreign currency loss as a Section 988 transaction and treat it as an ordinary loss in accordance with IRS guidelines. You would report this as other reportable income in Turbo Tax. This defaulttreatment of foreign currency gains is to treat it as ordinary income. “Except asotherwise provided in this section, any foreigncurrency gain or loss attributable to a section 988 transactionshall be computed separately and treated as ordinary income or loss (as thecase may be).”<\/p>\n
As I lost $12,000 and am trying to make sure I\u2019m doing the correct thing. I still treat it as \u201cother income\u201d and provide the -$12,000 in the https:\/\/traderoom.info\/oanda-overview\/<\/a> box correct?<\/p>\n I just do this as another source of income. I actually use a non regulated broker out of pure ignorance and have access to the total loss amount. I\u2019m guessing this is treated the same way?<\/p>\n","protected":false},"excerpt":{"rendered":" By default, retailFOREX traders fall under Section 988, which covers short-term foreign exchangecontracts like spot FOREX trades. Section 988 taxes FOREX gains and losses likeordinary income, which is at a higher rate than the capital gains tax for mostearners. An advantage of Section 988 treatment is that any amount of ordinaryincome can be deducted as … <\/p>\nExpert does your taxes<\/h2>\n