I just do this as another source of income. By default, retailFOREX traders fall under Section 988, which covers short-term foreign exchangecontracts like spot FOREX trades.

  • Section 988 gains or losses are reported on Form 6781.
  • By default, retailFOREX traders fall under Section 988, which covers short-term foreign exchangecontracts like spot FOREX trades.
  • You would report your foreign currency loss as a Section 988 transaction  and treat it as an ordinary loss in accordance with IRS guidelines.
  • I actually use a non regulated broker out of pure ignorance and have access to the total loss amount.
  • Section 988 taxes FOREX gains and losses likeordinary income, which is at a higher rate than the capital gains tax for mostearners.

Section 988 gains or losses are reported on Form 6781. You would report this as other reportable income in Turbo Tax. I actually use a non regulated broker out of pure ignorance and have access to the total loss amount. Yes, OANDA is a Forex and CFD broker and is regulated by Section 988 of the internal Revenue code. I still treat it as “other income” and provide the -$12,000 in the box correct?

  • Yes, OANDA is a Forex and CFD broker and is regulated by Section 988 of the internal Revenue code.
  • You would report this as other reportable income in Turbo Tax.
  • Section 988 gains or losses are reported on Form 6781.
  • An advantage of Section 988 treatment is that any amount of ordinaryincome can be deducted as a loss, where only $3,000 in capital gains losses canbe deducted.

You would report your foreign currency loss as a Section 988 transaction  and treat it as an ordinary loss in accordance with IRS guidelines. This defaulttreatment of foreign currency gains is to treat it as ordinary income. An advantage of Section 988 treatment is that any amount of ordinaryincome can be deducted as a loss, where only $3,000 in capital gains losses canbe deducted. Section oanda review 988 taxes FOREX gains and losses likeordinary income, which is at a higher rate than the capital gains tax for mostearners.