IB 1099 and futures commissions
- Thread starter svtrader
- Start date
I couldn't agree more. It is idiotic.
Does anyone know where to find the instructions to the provider of 1099s for futures trades?
I looked for the word "commission" in the various 1099 instructions on the IRS web site for some guidance on whether IB is doing this right or not, and couldn't even find a mention of this form being applicable to futures.
I looked for the word "commission" in the various 1099 instructions on the IRS web site for some guidance on whether IB is doing this right or not, and couldn't even find a mention of this form being applicable to futures.
EBO,
FWIW, according to the master tax guide, a commission paid by a trader in purchasing securities is part of the cost of the security and may not be deducted as a business expense. A commission paid by a trader in selling securites is an offset against the selling price and may not be deducted as a business expense, except by a dealer in securities, and then only as to securities held for sale to customers.
Backwardation
FWIW, according to the master tax guide, a commission paid by a trader in purchasing securities is part of the cost of the security and may not be deducted as a business expense. A commission paid by a trader in selling securites is an offset against the selling price and may not be deducted as a business expense, except by a dealer in securities, and then only as to securities held for sale to customers.
Backwardation
Thanks,
I am aware of that.
(My previous post was indeed confusing regarding data fees as opposed to commissions.)
My commissions are included as part of my net profit in my 1099.
I just report one number.
Data Fees that are deducted from the account are not included in the 1099 are taken as a business expense on Schedule C.
ebo
I am aware of that.
(My previous post was indeed confusing regarding data fees as opposed to commissions.)
My commissions are included as part of my net profit in my 1099.
I just report one number.
Data Fees that are deducted from the account are not included in the 1099 are taken as a business expense on Schedule C.
ebo
def
Sponsor
I'm not a tax expert and have an accountant do all my taxes. Thus I am not qualified to answer this. I do however believe we (IB) are completing the forms according to the requirements.
The info I have from a communique IB sent out is:
1099 for Futures - Titled "Substitute Composite Statement of 1099 Forms". This form reflects profit and loss from futures. Box 1a reports realized profit and loss for the year from futures, while box 1b displays realized profit and loss after 5/5/2003 when the new 15% capital gains tax was applied. Box 2a and 2b display aggregate profit and loss from futures using the same criteria as boxes 1a and 1b respectively. Box 3 shows interest income from futures, and box 4 displays commissions paid for futures transactions (commissions are not subtracted from boxes 1 and 2).
The IRS info page on 1099's is: http://www.irs.gov/instructions/i1099b/ar02.html
Other links:
http://www.irs.gov/irb/2003-38_IRB/ar23.html
Form 1099-B. Brokers and others reporting the gain or (loss) on regulated futures or foreign currency contracts report the profit or (loss) realized in 2003 in box 6 and the portion of that amount that is post-May 5, 2003, is reported in box 6a. Likewise, the aggregate profit or (loss) is reported in box 9, and the portion of that amount that is post-May 5, 2003, is reported in box 9a.
Example:
http://www.irs.gov/publications/p550/ch04.html#d0e14494
On June 23, 2002, you bought a regulated futures contract for $50,000. On December 31, 2002 (the last business day of your tax year), the fair market value of the contract was $57,000. You recognized a $7,000 gain on your 2002 tax return, treated as 60% long-term and 40% short-term capital gain.
On February 2, 2003, you sold the contract for $56,000. Because you recognized a $7,000 gain on your 2002 return, you recognize a $1,000 loss ($57,000 - $56,000) on your 2003 tax return, treated as 60% long-term and 40% short-term capital loss.
def, thanks for your response - but my concern is not about tax advice.
What I'm really asking is why can't IB report profit/loss net AFTER commissions as done by other brokers?
It looks like IB customers would really like that! What prevents IB from responding positively to this customer request?
What I'm really asking is why can't IB report profit/loss net AFTER commissions as done by other brokers?
It looks like IB customers would really like that! What prevents IB from responding positively to this customer request?