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This is just my opinion, and I'm no tax expert by any means, but until you are making a few $100Ks on Futures Trading, don't bother. It will only add complexity. You can still take advantage of the 1256 form.
WEBINAR: TAX STRATEGIES FOR TRADERS
TODAY @ 4:30PM EASTERN US
Presented by: Ryan Curran (Sponsored by Stage 5 Trading)
Topics include: Trader Tax Status overview,
Requirements for being classified as a Professional Trader,
Tax deductions available to Professional Traders,
And Tax Minimization Strategies -- plus Q&A
Does income from trading classify as foreign income? Or how about trading through an offshore company and paying yourself from it? I am curious because Uruguay does not tax foreign income unless its interest or dividends (according to URUGUAY: TAXES).
Understanding yourself is just as important as understanding markets.
I've been doing a lot of research on offshore banking and asset protection.
I am presently looking at several options, one such option is the combination of a Nevis LLC that holds the assets, and a Cook Island Trust which holds the LLC.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
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I thought the major advantage of mark to market accounting was that it allowed you to take unlimited losses?
If you don't have losses I wasn't aware that it changed anything?
An average taxpayer’s chance of being audited has tumbled 23 percent in three years, in line with an IRS budget that’s dropped an inflation-adjusted 17 percent since 2010. Only 0.9 percent of individual taxpayers were audited last year, the lowest proportion in seven years.
If you make $200,000 to $1 million annually, your chances of an audit are around 2.2 percent, more than double the average. It's even higher for the extra-wealthy—people who earn more than $1 million are audited at a rate of around 7.5 percent
Last year IRS audits of individuals uncovered $11.9 billion in unpaid taxes
For anyone living in the UK, there can be considerable advantages, under some circumstances, to trading by spreadbetting, because all profits are tax-free. In the UK spreadbetting is classified for tax-law purposes as "betting" and betting taxes were abolished decades ago. Even UK residents whose primary or sole income comes from spreadbetting are not liable for either income tax or capital gains tax on their profits.
It's worthwhile, of course, to check carefully how well and by whom a spreadbetting company is regulated, what the spreads are like, and whether counterparty trading is involved (in which they effectively hold the other side of their own clients' positions as many "retail forex brokers" do - but often they don't: they simply lay off their own net liabilities in the underlying market and have absolutely no incentive at all for any individual clients to lose their spreadbets).
Quite a lot of the "information" available online about spreadbetting (especially in trading forums) is somewhat prejudiced and hugely out-of-date: for example, there's a pervasive myth about wide spreads, which often isn't the case at all; and there's a similar myth that they don't allow "scalping".
(I haven't read every single post in this huge thread: apologies if this has already been mentioned, somewhere above.)
