Forex
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07-29-2008, 01:13 AM
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Net operating losses (NOL) give huge immediate tax refunds
NOLs may be carried back two tax years and/or forward 20 tax years.
NOLs may offset any type of income in prior and future years, whether you were/are a business trader then or not. Conversely, securities trading capital losses may only be carried forward and applied against capital gains. Futures trading capital losses may be carried back three tax years, but only applied against futures trading gains in those years. NOL tax treatment requires “trader tax status”(business treatment). It converts ordinary forex trading losses (IRC 988) into an NOL. Watch out! If you have negative taxable income (perhaps from forex losses and no other income) and you don’t qualify for trader tax status, your forex trading losses are wasted tax- wise. Trader tax status also converts your trading expenses in business expenses; also added to your NOL.      
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| forex, net operating losses, tax exemption, taxation, tips |
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