Where to enter currency trading losses?

burgerguy14 · ‎September 26, 2023

I have some losses from trading GBP/USD in the spot market. I was hedging a position in a UK ETF. I'm guessing the IRS will view these as separate positions.

Where should I report the currency trading losses?

Thanks

AR_CPA2 · ‎September 27, 2023

Foreign exchange (Forex) traders fall under Section 988, which covers short-term foreign exchange contracts like spot Forex trades.

Forex gains and losses are reported on your tax return as Other Income. Report a loss as a negative number.

To report your Forex loss, please follow these steps:

Click on Federal Taxes (left menu) then on Wages & Income/Income & Expenses (up top)
Under All Income, locate the Less Common Income section
Click Show more and click Start next to Miscellaneous Income, 1099-A, 1099-C at the bottom
Click Start next to Other Reportable Income
Describe the amount as Section 988 Forex gain or loss (enter a negative number for a loss)

Foreign Exchange Reporting Discussion

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View solution in original post

AR_CPA2 · ‎September 27, 2023

Foreign exchange (Forex) traders fall under Section 988, which covers short-term foreign exchange contracts like spot Forex trades.

Forex gains and losses are reported on your tax return as Other Income. Report a loss as a negative number.

To report your Forex loss, please follow these steps:

Click on Federal Taxes (left menu) then on Wages & Income/Income & Expenses (up top)
Under All Income, locate the Less Common Income section
Click Show more and click Start next to Miscellaneous Income, 1099-A, 1099-C at the bottom
Click Start next to Other Reportable Income
Describe the amount as Section 988 Forex gain or loss (enter a negative number for a loss)