DO YOU HAVE TO PAY TAXES ON YOUR CAPITAL GIANS ON FOREX?????????????

DO YOU HAVE TO PAY TAXES ON YOUR CAPITAL GIANS ON FOREX?????????????

SOMEONE TOLD ME YOU DONT HAVE TO BEACUSE ITS WORLDWIDE?

IS THIS TRUE?
I LIVE IN U.S ?

[wolf825]

Originally Posted by woore

DO YOU HAVE TO PAY TAXES ON YOUR CAPITAL GIANS ON FOREX?????????????

SOMEONE TOLD ME YOU DONT HAVE TO BEACUSE ITS WORLDWIDE?

IS THIS TRUE?
I LIVE IN U.S ?

The broker you use is most likely in the US....and they will send you a 1099 and a copy of that to the IRS....so whoever told you its "tax free" LIED. If it was tax free--no one would bother with stocks....

Get an Accountant who understands what market / commodity Traders do and have them help you set up things for yourself.. Some of the Forex brokers can even help advise you of who to go to or how the Tax reporting issues go for them as well and explain things more.. I believe GFT is reputed to do one of the best jobs at helping their clients with providing info for Tax reporting...

Some Forex brokers will report the bare minimum amount of info they are required to on a 1099, and other brokers will do a better job at reporting it on the 1099. Otherwise you can get a 1099 with a single number amount on one line as a total, and nothing else, and its up to you to figure the rest out of what to do with that...thats where the accountant/tax preparer comes in.

Check out www.fxstreet.com or www.Forexcentral.net ...as I recall I believe one of them just had a webinar or Q&A thingy or article up explaining Taxes and the IRS for Forex traders...

-w

[xspowerx]

The question is, what don't you have to pay taxes on?

Taxes on these things are so complicated, its not just simply reading the 1099. Different currencies have different tax rules. Its to complicated to explain, and I quite to understand myself.

[gdaddy]

Originally Posted by xspowerx

The question is, what don't you have to pay taxes on?

Taxes on these things are so complicated, its not just simply reading the 1099. Different currencies have different tax rules. Its to complicated to explain, and I quite to understand myself.

what about a broker that is in europe like a lot of them? it's money over there, so do I have to pay taxes here?

[xspowerx]

Originally Posted by gdaddy

what about a broker that is in europe like a lot of them? it's money over there, so do I have to pay taxes here?

Yes, you must pay taxes to the country where the broker lives in, and the U.S. Your best bet is to set up an offshore account, but I don't have much information about that.

For the record, the IRS has no way of tracking this so it similar to the honor system. Now if you bank 100,000 then yea it will eventually catch up with you. I haven't filed yet.