Wash Sale rules coming to futures and forex markets

[R1234]

Traders need to be aware that the new Social Spending bill has some disturbing stuff that directly affects high volume traders.

If the bill passes, then starting Jan 1st 2022 you will need to start accounting for wash sales in your futures, forex and crypto trading. See Section 138153 of the Ways and Means Committee report:

https://waysandmeans.house.gov/site...ns.house.gov/files/documents/SubtitleISxS.pdf

I for one have been heavily trading futures in my taxable accounts all these years because of the simple Mark to Market accounting and the single line item PnL on the year end 1099-B. Sadly this will come to an end and you will have to deal with the wash sale headaches which has been only in the equities domain thus far.

Then there's the new Retirement Accounts rule (Section 138302) that puts an upper limit on how big it can grow. But that's a topic for another thread...

Call your congressperson and voice your concerns before its too late.

 

[vanzandt]

Traders need to be aware that the new Social Spending bill has some disturbing stuff that directly affects high volume traders.

If the bill passes, then starting Jan 1st 2022 you will need to start accounting for wash sales in your futures, forex and crypto trading. See Section 138153 of the Ways and Means Committee report:

https://waysandmeans.house.gov/site...ns.house.gov/files/documents/SubtitleISxS.pdf

I for one have been heavily trading futures in my taxable accounts all these years because of the simple Mark to Market accounting and the single line item PnL on the year end 1099-B. Sadly this will come to an end and you will have to deal with the wash sale headaches which has been only in the equities domain thus far.

Then there's the new Retirement Accounts rule (Section 138302) that puts an upper limit on how big it can grow. But that's a topic for another thread...

Call your congressperson and voice your concerns before its too late.

Somewhere in there they double the tax on tobacco products.
No way The Turtle lets that fly.

 

[Overnight]

Oh no, I am SOO scared!

"Sec. 138153 Wash Sales This section includes commodities, currencies, and digital assets in the wash sale rule, an antiabuse rule previously applicable to stock and other securities. The wash sale rule in section 1091 prevents taxpayers from claiming tax losses while retaining an interest in the loss asset. The amendments made by this section apply to taxable years beginning after December 31, 2021..."

It doesn't state Futures, and the CFTC already has wash trade rules for all of it's products.

 

[R1234]

Oh no, I am SOO scared!

"Sec. 138153 Wash Sales This section includes commodities, currencies, and digital assets in the wash sale rule, an antiabuse rule previously applicable to stock and other securities. The wash sale rule in section 1091 prevents taxpayers from claiming tax losses while retaining an interest in the loss asset. The amendments made by this section apply to taxable years beginning after December 31, 2021..."

It doesn't state Futures, and the CFTC already has wash trade rules for all of it's products.

It says commodities, which implies commodity futures. And, no, futures contracts have never been subject to IRS wash sale rules.

 

[Overnight]

It says commodities, which implies commodity futures. And, no, futures contracts have never been subject to IRS wash sale rules.

So you are saying that if I buy and sell a future within a day, I cannot then trade that commodity for another 30 days to avoid the loss rule? HAH!

HFTs are going to be pissed!

 

[R1234]

So you are saying that if I buy and sell a future within a day, I cannot then trade that commodity for another 30 days to avoid the loss rule? HAH!

HFTs are going to be pissed!

That's correct. I would imagine it would also affect other businesses such as grain producers etc who need to actively hedge.

 

[Overnight]

That's correct. I would imagine it would also affect other businesses such as grain producers etc who need to actively hedge.

It would destroy the markets. It will not pass.

 

[SteveH]

A wash sale is essentially an end-of-year tax event. If there's no instrument to "hold the wash" then there is no wash sale and you can claim the losses for the current tax year.

You can calculate on paper all the wash sale trades you like from trade to trade during the year but they all go poof if there's no instrument to hold the wash because you waited 30 days at the end of the year before trading it again.

 

[MoreLeverage]

cannot then trade that commodity for another 30 days to avoid the loss rule?

The proposal is that you have to wait until the end of the following year to not trade it if you want to realize your loss. Plus in various cases involving related parties, you never get the loss - it’s just gone with no tax deduction.

https://waysandmeans.house.gov/site...ns.house.gov/files/documents/NEAL_032_xml.pdf

sounds like it includes futures too, on any of the now covered assets (stocks, crypto, forex, commodities).

“Such term shall, except as provided in regulations, include contracts or options to acquire or sell any specified assets.’’.

 

[KCalhoun]

I'm resisting the temptation to say that's what you get when you elect freaking Democrats in office, lots of new taxes to pay for a bunch of shit that nobody wants, except poor people. Oops oh my not politically correct I didn't say that out loud did I