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raheel_rajabali
New Member

I have a forex account with Oanda. Do I report the profit/losses as 1099-B or 6748? How can I go about finding thiese forms?

 
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MinhT
Expert Alumni

I have a forex account with Oanda. Do I report the profit/losses as 1099-B or 6748? How can I go about finding thiese forms?

By default, retail FOREX traders fall under Section 988, which covers short-term foreign exchange contracts like spot FOREX trades. Section 988 taxes FOREX gains and losses like ordinary income, which is at a higher rate than the capital gains tax for most earners. An advantage of Section 988 treatment is that any amount of ordinary income can be deducted as a loss, where only $3,000 in capital gains losses can be deducted.

Report the gains/losses in this way:

In TurboTax, open your return and follow these steps:

  • Click on Federal in the left hand column, then on Wages and Income on top of the screen
  • Scroll down to All Income, locate the Less Common Income section
  • Click Show more and click Start next to Miscellaneous Income at the bottom
  • On the next page, click Start next to Other Reportable Income (Losses are reported as a negative number).


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