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How do I pay income tax on ForEx earnings?

This is my first time for paying income tax on ForEx, being a US citizen i believe i have to pay tax on forex income, but i have no clue what do i have to do for that. Thanks for your help.

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3 Responses to “How do I pay income tax on ForEx earnings?”

  1. Jss said :

    Forex spot and forward contracts are IRC 988 foreign currency transactions. They are reported in summary form as ordinary gains or losses on line 21 of Form 1040 (Other Income or Loss). //np A trader or investor may elect out of IRC 988 for the more tax beneficial IRC 1256 with 60/40 tax treatment. //np Currency futures and options listed on U.S. commodities and futures exchanges are by default treated as 1256 contracts. They are reported on Form 6781, where they are split 60/40 before being moved over to Schedule D. Capital loss limitations of $3,000 per year apply.

  2. nakesha said :

    If you are looking for the best forex software, visit this site

    http://the-best-forex-software-in-internet.blogspot.com/

    This software is the best software that can help increase your trading profit and user friendly.

    Best Wishes,

  3. Income Tax Calculator said :

    If you are looking for forex you should defiently use IRC 988




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