We do not give tax advice so seek out a tax adviser that understands futures contracts. If you ask the tax adviser do you know how contract work and they look at you with a blank face or can't immediately answer they are the wrong person to do your taxes.

The information may be helpful when asking your tax professional who IS familiar with tax treatment So with the disclaimer in place here is the following information about reporting: They are based on forex and futures not on cash indexes etc Futures and reporting Reporting capital gains from futures trading is not quite the same as when trading stocks and options.

Capital gains from trading IRS Section contracts such as commodity futures, index futures, and index options are reported by your brokerage B or C for tax years prior to A commodity futures contract is a standardized, exchange-traded contract for the sale or purchase of a fixed amount of a commodity at a futures date for a fixed price.

If the contract is a regulated futures contract, the rules described under Section contracts marked to market apply to it. The termination of a commodity futures contract generally results in capital gain or loss. Reporting capital gains from futures trading is not quite the same as when trading stocks and options.

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What is a futures contract? According to IRS publication pages 50 and What is a Section Contract? According to IRS publication page Non-equity options include debt options, commodity futures options, currency options, and broad-based stock index options.

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A broad-based stock index is based upon the value of a group of diversified stocks or securities such as the Standard and Poor's index. Good news for active traders: The good news for traders of Section contracts is threefold:. A special loss carry-back election is allowed. Section contract net losses can be carried back 3 years instead of being carried forward to the following year. These losses can only be carried back to a year in which there is a net Section contracts gain, and only to the extent of such gain, and cannot increase or produce a net operating loss for the year.

The loss is carried back to the earliest carry-back year first and any unabsorbed loss can then be carried to each of the next two years. So if you have a net loss for the year, you can amend a previous year's tax return and possibly get a refund!

Your broker marks all of your open positions to market and reports the total gain or loss on a These entries then flow to your Schedule D - Part I, Line 4 for short-term capital gains and Part II, Line 11 for long-term capital gains. No additional detail or complex matched trade report as required for capital gains from stock, options, and single-stock-futures is required. I am new to Nadex trading, but I have used Turbo Tax Premium for years for tax return preparation because it can import transactions electronically from all my brokers into my tax return.

Does Nadex participate in this or other services? Are there any other recommendations for keeping records for the tax purposes? I figure I might as well start well knowing there will be many transactions.

Unlike stocks you don't have the transaction history to worry about, it is a simple field you enter it. You just need the B as it is I will have a tax webinar soon with someone who has the ability to advise on the subject. This is yet another reason to trade Nadex!

The guest webinar is an excellent idea. HI Darrell I was looking for a way to import my nadex trades into turbo tax. I am sure that you have some method to get that info into turbo tax besides listing each trade manually. Thank you for getting me on the right thread. I see you have explained the proper tax procedure in great detail. The IRS does not define a "swap" as a contract.

From IRS publication Exceptions. A section contract does not include: For more details, including definitions of these terms, see section If anyone has different information, it would be appreciated.

GREEN TRADER TAX http: Some months ago NADEX told me that their instruments are considered by the CFTC to be "commodity options" categorized as "swaps.

I am working with Green on getting it resolved and hopefully doing a webinar for us soon. Well it is certainly confusing, as "commodity options" are eligible for tax treatment using form , but "swaps" are not.

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Hopefully we'll get some resolution before the 15th, if not I can always file an extension. Personally I did not make enough enough money in to justify hiring a tax attorney or CPA, but this year is shaping up to be different. It seems so, but I think the term "commodity option" is only a description, not a category as is "swap. As stated DM is working w Green on getting clarity so a presentation can be made by Green.

It was clear and the case for commodity option was one that could be made until the cftc changed the classification recently do to Dodd frank. Commodities derivative financial instrument. A commodities derivative financial instrument is a commodities contract or other financial instrument for commodities other than a share of corporate stock, a beneficial interest in a partnership or trust, a note, bond, debenture, or other evidence of indebtedness, or a section contract the value or settlement price of which is calculated or determined by reference to a specified index as defined in section b of the Internal Revenue Code.

Publication , Sales and Other Dispositions of Assets http: It seems that makes it ordinary income loss? No one here can answer this you have to go to a cpa that is familar with investing and day trading tax code. Anything here will be a guess unless we have a resident CPA who will take on the liability via a forum to post it.

Powered by Discourse , best viewed with JavaScript enabled. Nadex Tax Treatment? S5 - Structure - Trading Essentials. Keep in mind the following when reading the below: A Section contract is any: Regulated futures contract Foreign currency contract Non-equity option And on page 40 under the Non-equity option heading: The good news for traders of Section contracts is threefold: I don't give tax advice please re-read the answer.

Interest rate swaps, Currency swaps, Basis swaps, Interest rate caps, Interest rate floors, Commodity swaps, Equity swaps, Equity index swaps, Credit default swaps, or Similar agreements.

Green doesn't know about their loss deduction status if that's what you want to know.

I would tend to agree, thanks for your input! I also found this: Noncapital Assets Commodities derivative financial instrument. Intro To Various Markets Nadex Spreads Apex Webinar Registration Helpful Links NinjaTrader Resources Download Link: Install Apex Elite Toolkit Get Free Chart Platform Ninja Trader Brokerage Free Data and Trials Link: Get Free Futures Data Link: Get Free Forex Data Link: