How you US citizens pay taxes on your forex gains?

Check out this forum for some answers on US tax treatment of forex trading:

http://www.learncurrencytrading.com/fxforum/forumdisplay.php?f=79

Remember, this is specific to US tax treatment.

Side note, you have been asking in various threads on this forum how to change your tax status. Understand, most of the participants on this forum are US located, and barely understand our own tax code on these issues, (most of the posters can't even trade a profit!!) which is why we seek the advice of professionals. I would suggest that you do the same in Brasil, where you say you are located. Only a professional on Brazilian taxation can adequately provide the advice you need.
 
Well put, cstfx.

Let me add this, briefly. Daal, have you ever placed any cash forex trades? More specifically, are you aware of what information a typical retail forex broker/dealer provides to you at year-end?

Here's why I ask. Let's accept, for the moment, your claim that Brazil taxes gross (profit only), rather than net (profit - loss) proceeds from trading, as you suggest... even though that doesn't make any sense whatsoever to those of us on the outside.

In the US, at least -- where you seem to be keen to conduct business -- the only document you'll receive at year-end (if you're lucky) is a 1099-INT, statement of net interest, either earned or charged, on your forex trading acccount. Neither you nor anyone else will ever receive anything showing your P/L... gross, net or any other kind. It's left up to... you guessed it... you, the trader, to correctly calculate your income from trading that forex account for the year and comply with your personal tax requirements, if any.

Given that basic year-end reporting reality in the retail forex world at this time, is it possible that you are kind of looking for a solution in search of a problem?
 
I rather not take the risk. I asked tax professionals and thats what they told me, no deducting of losses if outside the country so if I decide to use net profits I would be doing it against the law.

You correctly point out that I would probably get away with it but lets say they ask for my brokerage statements on a audit, then I'm dead as they will see I deducted losses. People with money outside the country are the main targets of IRS of any country, it aint worth the risk imo
 
Then there must be no traders trading internationally from Brazil - or they have to learn to make no losses :)

Quote from Daal:

I rather not take the risk. I asked tax professionals and thats what they told me, no deducting of losses if outside the country so if I decide to use net profits I would be doing it against the law.

You correctly point out that I would probably get away with it but lets say they ask for my brokerage statements on a audit, then I'm dead as they will see I deducted losses. People with money outside the country are the main targets of IRS of any country, it aint worth the risk imo
More...
 
Quote from eraci:

Then there must be no traders trading internationally from Brazil - or they have to learn to make no losses :)
More...

remember this is a country who has more people and natural resources in the entire latin america yet grew less than almost all of them in the last years given the level of taxes to gdp here. is it really surprising that they have insanities in the tax code that makes them get less revenue?i mean we are run by a madman
 
If you pay U.S. taxes, it's a no-brainer: trade the e-minis.

Why?

You get a 60% long-term/40% short-term tax treatment on your gains and it's a one-liner on your tax-form.
 
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