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The Tax Thread


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The Tax Thread

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  #261 (permalink)
 dannyinhouston 
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Thanks to everyone for this thread. Lots of good information. I will add one thing I did not see mentioned. After I started trading I had to "teach" my CPA about trader tax rules. He's a very good CPA and quite knowledgeable but very few normal CPAs have detailed experience with futures traders.

I shared my Greens books with him and then he did his own research and added even more value.

Just don't assume any CPA knows about all this stuff.

Looks like Peter Thiel also uses the Roth idea

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  #262 (permalink)
 SMCJB 
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dannyinhouston View Post
Thanks to everyone for this thread. Lots of good information. I will add one thing I did not see mentioned. After I started trading I had to "teach" my CPA about trader tax rules. He's a very good CPA and quite knowledgeable but very few normal CPAs have detailed experience with futures traders.

I shared my Greens books with him and then he did his own research and added even more value.

Just don't assume any CPA knows about all this stuff.

Or you could just use Green, Neuschwander & Manning, LLC themselves. That's what I've done for 11 years now!

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  #263 (permalink)
USS Liberty
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The June 2023 crude oil futures contract had a settlement price today (Dec. 31 2021) of 67.04 but after settlement time the contract traded up to a final trade at 67.40. For the mark to market end of year price for income tax purposes, which of those two prices will be used?

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  #264 (permalink)
 ghom971 
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Would use settlement prices directly from the exchange.
https://www.cmegroup.com/markets/energy/crude-oil/light-sweet-crude.settlements.html

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  #265 (permalink)
 shodson 
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I know if you hold a stock or ETF for more than a year and sell it you are taxed at a lower capital gains tax rate. Does the same hold true if I am short a stock for more than 12 months and then later cover the short position? Would those gains be taxed at the lower tax rate as well? Or does the lower capital gains tax rate only apply to long positions?

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  #266 (permalink)
 ghom971 
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https://www.law.cornell.edu/cfr/text/26/1.1233-1

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  #267 (permalink)
USS Liberty
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I ended up with a big futures trading loss for the 2018 tax year. I basically broke even in 2019 and 2020 but in 2021 I had a big gain. I did not specify any capital loss carryovers in my 2019 and 2020 tax returns. Would I be able to carryover my 2018 loss for my 2021 return? If so, would I need to file amended returns for 2019 and 2020 that include the carryovers, or would I be able to claim the 2018 loss directly on my 2021 return?

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  #268 (permalink)
 ghom971 
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As I understand it, if you didn't report the loss in the tax year it occurred and carried it over year after year, then you forfeit that loss. I am not a cpa, but if you were to report it then I would guess you would need to amend all the returns going back to the year of the loss.

https://www.irs.gov/forms-pubs/about-publication-550
the above publication would have more details.

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  #269 (permalink)
 dwt51 
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USS Liberty View Post
I ended up with a big futures trading loss for the 2018 tax year. I basically broke even in 2019 and 2020 but in 2021 I had a big gain. I did not specify any capital loss carryovers in my 2019 and 2020 tax returns. Would I be able to carryover my 2018 loss for my 2021 return? If so, would I need to file amended returns for 2019 and 2020 that include the carryovers, or would I be able to claim the 2018 loss directly on my 2021 return?

I would be curious to know why you didn't claim capital loss carryovers in 2019 and 2020. Perhaps the $3000 deduction off your income wasn't significant to you, but I've never heard of a downside to claiming it.

Fortunately, you are still within the three year window to amend those '19 and '20 returns (and presumably receive tax refunds for each year).

Regards.

dwt51

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