What are the taxes consequences for profit/loss in trading futures?

[vincentnyc]

I’m contemplating taking my trading to the next level and want to trade futures in the emini or micro mini for the spy.

3 questions:

1. Does wash/sale rules apply to futes similar to stocks? If not, what does it means?

2. Can you deduct any losses from trading futes at the end of the year? If yes, how much? I know for stock, you can deduct up to $3k loss per year and can keep rolling till next year if you have more losses.

3. How is it tax if you are profitable at the of the year?

This is for federal return and state return for NY.

 

[hilmy83]

I’m contemplating taking my trading to the next level and want to trade futures in the emini or micro mini for the spy.

3 questions:

1. Does wash/sale rules apply to futes similar to stocks? If not, what does it means?

2. Can you deduct any losses from trading futes at the end of the year? If yes, how much? I know for stock, you can deduct up to $3k loss per year and can keep rolling till next year if you have more losses.

3. How is it tax if you are profitable at the of the year?

This is for federal return and state return for NY.

no
3k
60% long term capital gains, 40% short term income

 

[Robert Morse]

I do not know about losses and tax loss carry forward or back. All futures are 1256 contracts with MTM accounting and no wash sales. Realized and unrealized P/L get aggregated at year end and your 1099 has no details, only a net profit or loss. They get recorded as 1256 contracts and your profits are split between 60% long term gains and 40% short term using the mixed straddle form. https://www.irs.gov/pub/irs-access/f6781_accessible.pdf

 

[mervyn]

I’m contemplating taking my trading to the next level and want to trade futures in the emini or micro mini for the spy.

3 questions:

1. Does wash/sale rules apply to futes similar to stocks? If not, what does it means?

2. Can you deduct any losses from trading futes at the end of the year? If yes, how much? I know for stock, you can deduct up to $3k loss per year and can keep rolling till next year if you have more losses.

3. How is it tax if you are profitable at the of the year?

This is for federal return and state return for NY.

One more thing to add, if you carry positions from Dec 31 to Jan 1, you will be taxed on unrealized gains, or offset unrealized losses.

 

[vincentnyc]

no
3k
60% long term capital gains, 40% short term income

What if you incur more than $3k loss for the year? Let’s say you loss $10k for the year. U deduct $3k, what about the other $7k?

 

[mervyn]

What if you incur more than $3k loss for the year? Let’s say you loss $10k for the year. U deduct $3k, what about the other $7k?

Carry to next year as usual.

The point of MTM is that one may have to pay phantom tax.

 

[tiddlywinks]

What if you incur more than $3k loss for the year? Let’s say you loss $10k for the year. U deduct $3k, what about the other $7k?

It carries forward. Just like stock losses.

 

[Robert Morse]

The IRS form I sent you to, read page 3-top left.

What if you incur more than $3k loss for the year? Let’s say you loss $10k for the year. U deduct $3k, what about the other $7k?

 

[vincentnyc]

Also can you deduct any fees such as your broker commission fees?

 

[vincentnyc]

One last question.

can you trade emini or micro emini on your regular ira or Roth IRA account? If yes, I’m assuming you can’t deduct loss or pay any taxes on your gains similarly if you are buy or sell stocks in your regular or Roth ira account?