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Taxes On Trading

Discussion in 'Beginners Bootcamp' started by Nick77, Nov 15, 2007.

  1. Nick77

    Nick77 Private

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    HI everybody,

    I have searched on the web and have not been able to find what the tax rate is for forex daytrading. I am a scalper and sometimes will place swing trades.

    I just want know what the tax rate for short term trading is and what form we are required to fill out. Also, do any of you go to H&R block or another agency or do you just do your taxes yourself?

    Thanks.
     
  2. Nick77

    Nick77 Private

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    Oh ya, what is 60/40? I just want to know what % of my profits I have to fork over to the government.
     
  3. Pharaoh

    Pharaoh Colonel

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    If you look in the Forex Articles forum, there's a thread about USA tax issues.

    Alternatively, I can help you out. Here's a preview of the new and improved, next generation very simplified 1299-FX tax form: :D

    IRS 1299-FX for 2009
    For reporting taxes due on all profits, losses, balances, and potential profits of forex trading


    Line 1. Enter your beginning balance. _____

    Line 2. Enter your ending balance. ______

    Line 3. Enter any amount you withdrew from your account. ____

    Do not attempt to lie about lines 1, 2, and 3. We already have that information from your broker.

    Line 4. Enter potential profit of all trades you wish you had taken and didn't. ___

    Line 5. Enter potential additional profit of all trades you took, but wish you had gone in for larger lot sizes. _____

    Do not attempt to lie about lines 4 and 5. That chip we planted in your head while you were sleeping sent that information to us in real time.

    Line 6. Sum of Lines 1, 2, 3, 4, and 5. ______

    Line 7. Multiply 0.9 times line 6. ______

    Pay the IRS the amount in Line 7. Do not bother with a stamp. This form contains embedded nano-circuitry that has signaled the nearest collection agent as soon as Line 7 was completed. The collection agent will be arriving at your location within 10 minutes. Failure to present payment immediately is punishable by fine of not less than $50,000 and imprisonment for a term of not less than 10 years.

    Remember, the IRS is here to help the taxpayers. If you have any trouble filling out this form, please call our 900 number for assistance. The cost is only $4.95 per minute, average hold time is 73 minutes, and we make no guarantee of accuracy of any responses.
     
  4. Nick77

    Nick77 Private

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    Ha HA

    I read the other article and some of its links but I still don't understand 60/40. Does that mean i pay 60% tax on short term trades and 40% on trades over a year? That seems like a lot. Does it matter what income bracket your in?
     
  5. Droid3000

    Droid3000 Private

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    Failure to present payment immediately is punishable by fine of not less than $50,000 and imprisonment for a term of not less than 10 years.
    This is crazy. There is 15% Tax in my country for that type of income.
     
    #5 Droid3000, Nov 30, 2007
    Last edited: Nov 30, 2007
  6. Pharaoh

    Pharaoh Colonel

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    What? You think that was the crazy part? :confused:


    And I went to so much trouble to put really crazy things in it. :wacko:
     

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