The Tax Thread

Been a while... another interesting blog post from Robert Green of Green Trader Tax (yes still a client).

Trader Tax Battle Of The States: California Vs. Texas

Forbes:- Trader Tax Battle Of The States: California Vs. Texas

aka why its awesome to be a trader in Texas (even if you are surrounded by ...)

Upcoming the rest of five-part blog series: Tax Battle Of The States
New York Vs. Florida;
Midwest Vs. Southeast Top 10 States;
New Jersey, Washington & Massachusetts;
Nevada, New Hampshire & District Of Columbia

As a general rule, if you trade futures and become a member of an exchange, you are subject to Self-Employment Tax on the income.

I have recently come across the opinion that if you have an "Electronic Corporate Membership" that is not the case. Has anyone else heard, or acted upon, this?

Laconic 

As a general rule, if you trade futures and become a member of an exchange, you are subject to Self-Employment Tax on the income.

This used to be a bad thing but with the implementation of the 'investment tax' I believe there are ways that paying SE can reduce your investment tax bill but allow you to deduct pension contributions.

Laconic 

I have recently come across the opinion that if you have an "Electronic Corporate Membership" that is not the case. Has anyone else heard, or acted upon, this?

Sorry can't help.

If one owns and has read Robert Green's "The Tax Guide for Traders" from a number of years ago what is the additional benefit, if any, of buying "Green's 2016 Trader Tax Guide"?

Laconic 

If one owns and has read Robert Green's "The Tax Guide for Traders" from a number of years ago what is the additional benefit, if any, of buying "Green's 2016 Trader Tax Guide"?

No idea. I have like their 2008 edition (which I thought was quite good) but haven't bought it since as they now do my tax's.

I am moving to Calgary this December and i trade American Futures (ES, CL, 6E)as well. Can you share your experience with me regarding choosing an American Broker and the tax formalities you need to fulfill? I have contacted Global Futures and IB. Global has higher than normal commissions and IB's data is not the best as i use tick and range charts.

Thanks

punitsomaya 

I am moving to Calgary this December and i trade American Futures (ES, CL, 6E)as well. Can you share your experience with me regarding choosing an American Broker and the tax formalities you need to fulfill? I have contacted Global Futures and IB. Global has higher than normal commissions and IB's data is not the best as i use tick and range charts. Thanks

We would be more than happy to help. If you are moving to Canada as a "landed immigrant" status I assume you will pay Canadian taxes via the 1099 you will receive from your FCM. If you are moving to Canada without a status then you would have to pay taxes though your native country. Either way, you have to declare it somewhere.
If you gain contact with us we would be more than happy to provide favorable terms to your trading.

I hope this helps.

Thanks,
Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Matt...I will give you a call tomorrow in AM...thanks for your reply


Sent from my iPad using futures.io mobile app

punitsomaya 

Matt...I will give you a call tomorrow in AM...thanks for your reply Sent from my iPad using futures.io mobile app

You most welcome. Looking forward to hearing from you.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Matt from Optimus is extremely helpful. I got so much credible information from him. I think what separates good brokers from excellent brokers is that personal interaction regarding your trading needs. I am giving my business to him and I highly recommend Matt to any futures traders out there.

Anyone have experience with Anderson Advisors (Clint Coons) that can comment on their experience?

Hello,

I have an old LLC that I stopped filing taxes for since I wasn't using it in the past but thought it could come into play for trading. Is it beneficial to put your income from trading in a LLC instead of just filing it with your regular taxes?

Hi guys,

It is my pleasure to welcome Ryan Curran from Curran Unger LLP on Thursday, February 9th @ 4:30PM Eastern US.

The topic for this webinar is "Tax Topics for Traders", and bullet points include:

- Making the Mark to Market Election - Mechanics, Issues, and Implications
- Trader Tax Status - Tax Benefits of Qualifying as a Professional Trader
- How to Qualify for Trader Tax Status - Specifics and Possible Pitfalls
- Q&A for members

Register for the event:
https://on.futures.io/4hzbq

Mike

Webinar recording:



Mike

What did everyone think of the webinar?

Mike

Great webinar, always a pleasure to listen to someone who really knows what they are talking about.

Agree. Thought it was a very knowledgeable webinar.

SMCJB 

+1 for GreenTraderTax. I'm a very happy client. Their knowledge of trading related tax matters is excellent (and their specialty).

Do you still use them? I am out of the US and last year the new H&R Block "Block advisors" charged me insane fees.
If you could help me with an email contact (internal message). I would appreciate it.

Thanks!

ElChacal 

Do you still use them? I am out of the US and last year the new H&R Block "Block advisors" charged me insane fees. If you could help me with an email contact (internal message). I would appreciate it. Thanks!

Yes & Contact Sent

Hey guys

Can anyone help me with question on taxation?

I'm a citizen of Republic of Armenia, if I open trading account in US or UK based company which taxes I have to pay?

And is there difference if I trade stocks, futures, options or Forex?

Tinwoodman 

Hey guys Can anyone help me with question on taxation? I'm a citizen of Republic of Armenia, if I open trading account in US or UK based company which taxes I have to pay? And is there difference if I trade stocks, futures, options or Forex?

In the United States you sign a form called W8 which is "Certificate of Foreign Status of Beneficial Owner for United
States Tax Withholding and Reporting (Individuals)" This means that you are not paying taxes in the USA rather it is your own individual obligation to pay it in your own country.

I believe this applies to all asset classes and if you are not a citizen or resident of other countries, they would have a similar form. You need to also ask your broker is there are any treaties between your country and the country of your brokerage where other laws may apply.

Here is an example of such form in the USA -- W8

I hope this helps.

Thank you,

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

mattz 

In the United States you sign a form called W8 which is "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)" This means that you are not paying taxes in the USA rather it is your own individual obligation to pay it in your own country. I believe this applies to all asset classes and if you are not a citizen or resident of other countries, they would have a similar form. You need to also ask your broker is there are any treaties between your country and the country of your brokerage where other laws may apply. Here is an example of such form in the USA -- W8 I hope this helps. Thank you, Matt Z Optimus Futures There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Thanks, mattz, that really helps.

Still very early to know what, or if anything, gets passed but this is an interesting discussion of the potential implications. Especially for business traders with entities.

Green Trader Tax :- How Tax Reform Framework Impacts Traders And Investors
https://greentradertax.com/how-tax-reform-framework-impacts-traders-and-investors/

Disclaimer:- I'm still a Tax Client of Green, Neuschwander & Manning an affiliate of Green Trader Tax

RickeyJew 

Производство мебели на заказ в Санкт-Петербурге, подробности смотрите на сайте akro-spb ru akro-spb ru

not sure what making furniture in St. Petersburg has to do with trading but....

Green Trader Tax 1/9/18 :- How To Decide If A C-Corp Is Right For Your Trading Business
https://greentradertax.com/how-to-decide-if-a-c-corp-is-right-for-your-trading-business/

Green Trader Tax 1/12/18 :- How Traders Can Get The 20% QBI Deduction Under New Law
https://greentradertax.com/how-traders-can-get-the-20-qbi-deduction-under-new-law/

Disclaimer:- I'm still a Tax Client of Green, Neuschwander & Manning an affiliate of Green Trader Tax

Green Trader Tax :- The Tax Cut Impacts Investors In Negative And Positive Ways
https://greentradertax.com/the-tax-cut-impacts-investors-in-negative-and-positive-ways/

Quoting 

The new law suspends “all miscellaneous itemized deductions that are subject to the two-percent floor under present law.” These include investment expenses, unreimbursed employee business expenses and tax compliance fees for non-business taxpayers. Miscellaneous itemized deductions are an AMT preference for 2017. Investment expenses include trading expenses when the trader is not eligible for trader tax status (TTS), stock borrow fees and related costs for short sellers without TTS, and investment advisory fees and expenses paid to investment managers. TTS traders have business expense treatment, so qualification for that status is essential in 2018.

Disclaimer:- I'm still a Tax Client of Green, Neuschwander & Manning an affiliate of Green Trader Tax

I just posted this in a cryptothread but thought I would repost here as this is the "Tax Thread"


Greentrader Tax - Jan'18 :- Cryptocurrency Traders Owe Massive Taxes For 2017

Or, when a coin miner receives a coin for his work, he or she naturally recognizes business revenue based on the value of the coin.

more...
https://greentradertax.com/cryptocurrency-traders-owe-massive-taxes-for-2017/


Greentrader Tax / Forbes - Aug'17 :- How To Report Bitcoin Cash And Avoid IRS Trouble

Bitcoin holders were distributed one unit of Bitcoin Cash for each unit of Bitcoin, a separate financial instrument with a liquid market value. In the eyes of the IRS, that’s taxable income. Bitcoin holders should report the receipt of Bitcoin Cash on their 2017 income tax returns. It does not qualify as dividend income on Schedule B since a cryptocurrency is not a security. It’s also not considered interest income on a debt instrument or bank deposit.

more...
https://greentradertax.com/how-to-report-bitcoin-cash-and-avoid-irs-trouble/


Greentrader Tax / Forbes - Feb'17 :- If You Traded Bitcoin, You Should Report Capital Gains To The IRS

The IRS considers cryptocurrencies, including Bitcoin, to be “intangible property.” Investors and traders holding cryptocurrency as a capital asset should use capital gain or loss tax treatment on sales and exchanges, with the realization method. For example, if you buy Bitcoins with U.S. dollars and later sell them for U.S. dollars, a capital gain or loss needs to be reported on that transaction. An exchange of one cryptocurrency for another cryptocurrency is a taxable sale transaction, even though U.S. dollars are not involved in the transaction.

more...
https://greentradertax.com/if-you-traded-bitcoin-you-should-report-capital-gains-to-the-irs/

Disclaimer: I'm a client of a GreenTrader Tax affliate.

Big Mike 

Hi guys, It is my pleasure to welcome Ryan Curran from Curran Unger LLP on Thursday, February 9th @ 4:30PM Eastern US. The topic for this webinar is "Tax Topics for Traders", and bullet points include: - Making the Mark to Market Election - Mechanics, Issues, and Implications - Trader Tax Status - Tax Benefits of Qualifying as a Professional Trader - How to Qualify for Trader Tax Status - Specifics and Possible Pitfalls - Q&A for members Register for the event: https://on.futures.io/4hzbq Mike

And how do I sign up?

samiotis 

And how do I sign up?

Right after you find a time machine. That was last year.

So does anyone trade a ROTH Ira and withdraw their profits and not pay any taxes on it?

Sent using the futures.io mobile app

cshrum 

So does anyone trade a ROTH Ira and withdraw their profits and not pay any taxes on it?

Only if you're over 59 1/2, had a ROTH at least 5 years and profitable.
(not me yet, on either, but hope to be both within 5 years )

Hi guys,

It is my pleasure to welcome back Ryan Curran CPA @ Curran Unger LLP for our 333rd webinar event on Tuesday, January 15th @ 4:30 PM Eastern US.

The title for the event is "Tax Topics for Traders in 2019", and bullet points include:

- Tax plan updates for 2018 Tax Year
- Qualified business income deduction
- Qualified opportunity zone tax deferrals
- Trader tax status - qualifications and implications
- Q&A session with Ryan Curran CPA, attend live to get your questions answered



Register for event:
https://on.futures.io/jk1ps

Mike

Webinar recording:



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Mike

Hi, will Ryan answer a question?

I'm trying to figure out how I can get a bank to give me a loan against my trading profits? I own a few properties and would like to do a cash-out re-fi on them.

Right now I live in CA but I own two homes in FL that are rented out. I don't have any entities setup yet.

How will trading for earn 2 trade be treated? Still get the preferred tax treatment of trading futures vs regular income?

Thanks

Sent using the futures.io mobile app

I have to report a lost for the year and I would like to know if I can deduct transaction costs for futures contracts. I do not see it on my 1099 from the tdameritrade so I am guessing I can’t. Thank


Sent from my iPhone using Tapatalk

jngrim 

I have to report a lost for the year and I would like to know if I can deduct transaction costs for futures contracts. I do not see it on my 1099 from the tdameritrade so I am guessing I can’t. Thank

I believe 1099s are net of brokerage costs.

question about just Form 1256 - if you lost money last year, but made money this year trading only futures both years, do you get to subtract those losses from this year's gains? and you can do that for the preceding 3 years, right?

traderthrowaway 

question about just Form 1256 - if you lost money last year, but made money this year trading only futures both years, do you get to subtract those losses from this year's gains? and you can do that for the preceding 3 years, right?

since you are allowed to carry loss forward you def can subtract your loss (Y17) against your gain (Y18). Even if you don't file on your loss you can always carry it forward forever.

Being from Europe opening a margin account in the US for Futures trading I wonder whether providing the broker with a tax form like W8-BEN or similar would help me to avoid any deduction at source tax and any other tax within the US.

I heared about this 60/40 tax rule which seems to be relevant for Futures traders and I am not sure whether any W8-... form helps with regards to taxes in the US when it comes to gains from Futures trades. Or is there perhaps another attempt one should consider when having a US Futures broker without being a US citizen and without living in the US?

Does anybody have any experience with that?

Thanks a lot,
L.J.

Interesting article for all you full time traders out there. Discusses Trader Tax Status as well as the potential health insurance and retirement plan savings that you can achieve with an S-Corp. (Which is what I do, so I can vouch for its effectiveness - at least in my case!)*.

How To Structure A Trading Business For Significant Tax Savings
by Robert Green / Green & Company / Green, Neuschwander & Manning
Read at GreenTraderTax or at Forbes

*Full Disclosure: Green, Neuschwander & Manning, LLC have been my accountant for approximately 10 years. If you would like to discuss in anyway feel free to message me. I have no financial arrangement with them, just a happy client spreading the good news

I'm a tax professional that started trading futures last year. I'm blown away with how favorable the tax treatment is and can't image why anyone would trade any other type of security on a short term basis.

I read Mr. Greens book which provided some very good information for taxpayers and professionals alike. He recommends the practitioner making footnotes to provide details relating to "trader tax status".

Does anyone file a form 8275 disclosure statement to provide additional details? I just know in my experience filing a Sch C with expenses only is eventually going to be examined.

booneyall 

I read Mr. Greens book which provided some very good information for taxpayers and professionals alike. He recommends the practitioner making footnotes to provide details relating to "trader tax status".

I'm a Green (Neuschwander & Manning) client and have been for many years. On my latest return they sent me they added 8 pages of Federal Statements which basically explains lots of details on the actual return. They also added 2 pages of Federal Supplemental Information which justifies my qualification as a "trader in commodities" and highlights the rules associated with that. Not sure if this is what they mean "footnotes" but I've always been impressed with their thoroughness.

Thinking about this some more, I've always assumed that those additional pages are included in my return but maybe they are just there for explanation/record. I think I will ask.

booneyall 

Does anyone file a form 8275 disclosure statement to provide additional details? I just know in my experience filing a Sch C with expenses only is eventually going to be examined.

My return is large but it does not include an 8275.

According to the IRS

About Form 8275, Disclosure Statement
Taxpayers and tax return preparers use this form to disclose items or positions that are not otherwise adequately disclosed on a tax return to avoid certain penalties.

I'm not an accountant but my interpretation of that is that it's used to add information about things not on your tax form any where else, not to supply additional information for things that are.

SMCJB 

... added 8 pages of Federal Statements ... added 2 pages of Federal Supplemental Information ... ... Thinking about this some more, I've always assumed that those additional pages are included in my return but maybe they are just there for explanation/record. I think I will ask.

I can confirm that the 10 additional pages above are included with my tax return.

Hi guys,

It is my pleasure to welcome back Ryan Curran, CPA, for our 383rd webinar event, on Thursday, April 30th @ 4:30 PM Eastern US.

This webinar would normally be available only to Elite Members, however, considering the extraordinary times we currently face and the tax implications, I have decided to make the webinar open to everyone.

The title for the event is "2020 Tax Topics for Traders w/ Ryan Curran CPA", and bullet points include:

- Detailed Discussion of Trader Tax Status - What tax benefits does TTS afford taxpayers?
- MTM Election and implications
- Wash Sales
- Tax Reporting Requirements
- Entity Choices - Sole Proprietorship / LLC / S-Corporation / C-Corporation



Register for the event:
https://on.futures.io/468tz

Mike

Webinar recording:



Please give us feedback and comments:

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Mike

anyone has any idea on recent trump potential executive order on capital gains taxes?

Big Mike 

I thought we could use a thread devoted to Taxes. This is all things taxes regarding trading. One example, Advantages/disadvantages for different situations (equities, futures, forex, etc) as well as benefits of filing sole-proprietor vs LLC or as a CTA/professional, etc. If you have something to share on the subject please chime in. Mike

I'm trading futures out of an IRA roth account. Account grows tax free(assuming I can be profitable) and there are no taxes/penalties if you withdraw after the age of 59 1/2. There are some other withdraws that are exempt as well. This is my simple strategy.

sandtrading 

anyone has any idea on recent trump potential executive order on capital gains taxes?

I think it's just something he is proposing/wants to see but wasn't included in the executive order.

traderalex81 

I rather pay more in taxes but not have him in the office.

Elsewhere please.

I needed some help or advice about a tax related question. Say someone has an account through Interactive Brokers and they have the legal resident of Saudi Arabia listed as the current country of residence (currently live and work there). However they are a citizen of the Philippines, however the wages made from working there are tax free. Here comes the question. If that same person holds a U.S. stock and gets paid a dividend who pays the tax or who takes the tax? I know some countries withhold a certain percentage of the dividend paid. I thought I read that Saudi withholds 5%, but the Philippines withholds 30%. If you are a legal resident of Saudi Arabia and they withhold, is it still required to pay taxes again to the Philippines? Thank you for the help if anyone has experience with this.

Hi guys,

It is my pleasure to welcome Ryan Curran, for our 417th webinar event, on Tuesday, March 16th @ 4:30 PM Eastern US.

The title for the event is "Tax Topics For Traders: 2021 Calendar Year Update", and bullet points include:

Ryan founded Curran & Company in 2012 and has a BS in Accounting and Finance from Rutgers Business Law. Ryan graduated with honors and with a Juris Doctor degree

- This webinar: Detailed Discussion of Trader Tax Status
- What tax benefits does TTS afford taxpayers?
- MTM Election and implications
- Wash Sales
- Tax Reporting Requirements
- Choosing what’s best between: Sole Proprietorship, LLC, S-Corporation, and C-Corporation entities
- Bring your questions & receive answers during the live event

Ryan started his career in public accounting in 2007 while finishing his undergraduate education. After working for highly-regarded regional public accounting firms in the New York & New Jersey area for several years, Ryan founded Curran & Company in 2012 with the intention of providing high-value and high-quality tax, accounting, and advisory services to small to mid-size businesses and individuals.

As an entrepreneur, Ryan is well equipped to provide truly meaningful insight and advice to the Firm’s business clients on tax and business issues.

Ryan earned a Bachelor of Science in both Accounting & Finance from Rutgers Business School in Newark, New Jersey, graduating with honors. He graduated from Rutgers Law School with a Juris Doctor degree, after attending evening classes from 2012 to 2016.

Ryan is a Certified Public Accountant in New York and New Jersey. He is also authorized to practice Law in the State of New Jersey and actively practices law through a wholly-owned entity unaffiliated with the Firm.



Register for this event:
https://on.futures.io/c6fjr

Mike

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Mike

Seems there's a two-minute chunk missing starting at about 7:12 mark.

sgjohnson 

Seems there's a two-minute chunk missing starting at about 7:12 mark.

Hmm, @Rrrracer can comment.

Mike

sgjohnson 

Seems there's a two-minute chunk missing starting at about 7:12 mark.

@sgjohnson, @Big Mike, I went back and checked it, looks like a mistake on my part in post-processing. There is no missing information, that blank chunk accidentally got added in (learning new software LOL.) You're good to go, and apologies.