This is even worse than US clients effectively being barred from using another good broker. Forex FS was the last broker, to my knowledge, to offer the JForex platform to US retail clients. If anyone knows of another, please share. (JForex users accounts closed by Alpari, then, FXDD, now Forex FS… for being US citizen)… This is not as trivial as switching brokers for people who have invested in coding in the JForex API.
Does anyone know anything about TradersWay? They accept US traders. I heard very good things about this broker. However, there seem to be server issue Demo as well as Live server today. Their live chat also went offline suddenly. Hope this is something technical issue and they will come back soon. Anybody has feedback on this?
Has anyone tried incorporating, or opening brokerage accounts using a business name? I wonder if foreign brokers will open accounts for US based Corporations (or, perhaps, but probably not, even sole proprietorships). If not, a possible solution would be for several like minded individuals to form a trading corporation, which may need to based outside the US, and open forex accounts as the corporate entity. This is, of course, all entirely absurd, but sadly it may be necessary with current Byzantine regulations.
I noticed yesterday that the Russian brokerage Tradersway, ne0tFX1, had its Meta4 platform offline several hours in the evening, but it did come alive again about when the Asian session started at 7:00 PM CST. When trading with them, especially when major economic reports are released it might be a good idea to always have a stop in place, if you can figure out how to place a stop on a Meta4 trading station. I like Tradersway, though, because those clever Russians have lowered the bid ask spread on their US30 index all the way down to just 1 pip during the American session, which “beats the pants off” all other brokers to my knowledge. Most brokers charge 4 to 5 pips spreads on their Dow Jones Industrials equivalent indexes. Tradersway also requires very small margins per .01 volume, though requiring .1 volume to trade, for gold and the US30 index, which is much, much lower than what most other brokers require. I also really like Tradersway’s lightning fast trade executions, which is what you want for hit and run scalping.
Hey, you were right. I was able to open an account with my other passport.
Now I’m wondering how I will file my taxes. I opened an account with an Australian broker with my non-USA ids(passport).
Anyone know where I can’t get more info on this?
Those of you trading with foreign brokers, how do you report your earnings when you file taxes?
General rules:
(1) If you are a U.S. citizen or legal U.S. resident, you must report all of your worldwide income to the IRS, and pay applicable tax on it. If you have an offshore forex account, and if you have net profit for the tax year in that account, then you must include that net profit in your tax return just as if it were earned in a U.S. forex account.
(2) If you are a U.S. citizen or legal U.S. resident, and all of your offshore financial accounts (forex accounts, bank accounts, etc.) hold a combined total of $10,000 or more, then you must report the details of those accounts to the IRS (on a separate form) [B]whether those accounts produced taxable profits, or not.[/B] The form for reporting these accounts is called [B]FBAR[/B] (Report of Foreign Bank and Financial Accounts, formerly called [U]F[/U]oreign [U]B[/U]ank [U]A[/U]ccount [U]R[/U]eport). Note that the $10,000 threshold applies to the highest combined balance of all your offshore accounts at any time during the tax year. See here — Report of Foreign Bank and Financial Accounts (FBAR)
(3) If you are a U.S. citizen or legal U.S. resident, not living abroad, and you are filing your taxes as a single individual, and your offshore accounts hold a combined total of $50,000 or more on the last day of the tax year, or $75,000 or more at any time during the tax year, you must file [B]Form 8938[/B] (Statement of Specified Foreign Financial Assets) [B]in addition to the FBAR form[/B] referred to above. See here — Comparison of Form 8938 and FBAR Requirements
In addition to all of the above, each individual trader has to deal with the issue of what filing status to choose for reporting forex profits and losses (whether in a U.S. account or an offshore account). The two choices here are Section 1256 or Section 988 (“section” refers to sections of the Internal Revenue Code). Here is some general information regarding this choice — The Super Basics of Forex Trading and Taxes | Forex Blog: Espipionage
If you are subject to local tax in the country where your offshore account is domiciled, then you will have the added chore of determining whether (and how) you can claim a tax credit for that foreign tax on your U.S. tax return.
Finally, don’t rely on anything you read in forums, or elsewhere on the internet, as authoritative tax information. Instead, do your own tax research and due diligence, if you feel qualified to do so, or hire professional legal/accounting services. There are tax accountants and tax attorneys who specialize in taxes for traders. Here is one — (see the edit, below) — but, there are others, so shop around. They aren’t cheap. But, if you have substantial net worth, substantial annual income, significant foreign holdings, or significant forex profits, then you may discover that the fees charged by tax professionals are trivial compared to the hurt the IRS could put on you for violating their rules.
Here’s another article you may find useful — Handling New IRS Foreign Reporting Requirements Without Doing Jail Time - Forbes
Edit:
I have deleted the name of the tax accountant/attorney previously recommended above. This attorney is dispensing false information regarding the legality of trading offshore, and has even taken it upon himself to report one (or more) of the offshore brokers in our List to the CFTC — a silly move, on its face, because the CFTC reads this thread, and knows more about what we are doing here than the tax attorney does.
Bottom line — If you consult with a tax professional on the handling of your forex tax obligations, find out right up front whether that professional understands the legality of offshore trading. If (like the name I have removed above) he thinks that your offshore trading is illegal, educate him — or find another tax professional.
.
Let a professional handle your taxes. They can save you money, and advise you. My tax account and lawyer have saved me thousands.
Thanks for the through information. I will report all earnings, but I wonder if I would get in trouble for having a forex account with a foreign broker, since we’re not allowed to have accounts with foreign brokers.
Anyone who has reported income earned in forex with a foreign broker? (For those in the US)
Please share your experience.
Thanks.
No, you will not get into trouble for trading with an offshore broker.
That question has been asked and answered many times on this thread, [I]including just 4 days ago.[/I]
Dozens of forum members have contributed to this thread over the past 4 years, devoting a total of several thousand man-hours to finding, discussing and posting the facts and figures related to [I]offshore forex trading by citizens and legal residents of the U.S.[/I] Do you think we would have spent all that time and effort investigating how to do [I]something that would land us in jail?[/I]
Not true. There are no laws or regulations saying that you can’t have an offshore forex account.
I doubt that you will get any useful responses to that question.
Those who post specific information about their taxable forex earnings, in a public forum, using their real names — are being foolish, in my opinion. I certainly wouldn’t post any of my personal financial information here, or anywhere else on the internet.
And anyone who posts specific financial information, [I]using a screen-name or an alias,[/I] is probably blowing smoke.
If it’s $30 for withdrawals, that’s not too bad if it’s a bank wire. A bit pricey, but not outrageous. My bank charges $20 for a wire transfer. Definitely not worth it if you’re taking out $100. But if you’re taking out $1000+, it’s not that big of a deal then.
I am adding [B]Exness Ltd[/B] (Cyprus) to Group 2 (brokers that [B]will not accept U.S. clients[/B]).
Exness is an active advertiser on [I]Babypips,[/I] and an active participant in the [I]Forextown[/I] forum. However, U.S. members of the [I]Babypips[/I] community — who constitute a majority of the members here — are not welcome at Exness, and should ignore this broker.
The Exness website uses pop-up messages to warn anyone accessing their site from a U.S. IP address that they are not welcome. And at least one of their pop-ups includes an invitation to [I]rat out anyone you know who is circumventing their policy against U.S. clients.[/I]
Here is one of their pop-ups —
Access denied for the US citizens
According to the Exness company internal policy rules, we do not provide any service to US individuals or legal entities.
US citizens are not able to register any kind of accounts in Exness company. The Company does not proceed any financing transaction from the US citizens.
Attention! If you find out that someone is trying to break this rule, we kindly ask you immediately inform us by the following e-mail: <[email protected]>
We have IKOFX listed as a Cyprus broker that will do business with U.S. clients.
The Cyprus part is wrong, for sure. Some other things are not so sure.
I revisited the IKOFX website and learned that they are now domiciled either in New Zealand, where they are regulated by the Financial Service Providers (FSP) — or in British Virgin Islands, where (apparently) they are unregulated.
If you study the IKOFX website, you will find references to New Zealand headquarters, and New Zealand regulation.
For example, this fine print appears at the bottom of their home page:
Copyright©2010 IKOFX.COM. All rights reserved.
Forex trading involves significant risk of loss and is not suitable for all investors. Read full disclosure.
IKO Limited.
10c, 17 Albert Street, Auckland Central, 1010 New Zealand.
Email:[email protected]
And this is their regulation page.
But, only in one place — on their contacts page — will you find any reference to British Virgin Islands. And on that page, they make it look as though they have 2 headquarters locations: BVI and New Zealand.
Note that 100ForexBrokers lists IKOFX as an unregulated broker domiciled in British Virgin Islands, with head office in Tortola, BVI.
One thing is certain: IKOFX is not a Cyprus broker.
The relocation of forex brokers from Cyprus to New Zealand is explained in this article from forexbrokerz.com.
In addition to all the confusion about IKOFX referred to above, there is this: The regulator in New Zealand is the Financial Markets Authority (FMA), not the Financial Service Providers (FSP) referred to on the IKOFX website and in the forexbrokerz.com article.
As far as I can tell, IKOFX still welcomes U.S. clients, but this needs to be confirmed.
I’m guessing that U.S. clients — if they are, in fact, accepted by IKOFX — will have their accounts domiciled in BVI.
And, I’m also guessing that IKOFX accounts in New Zealand are for New Zealand citizens/residents only.
These guesses need to be confirmed.
For now, I’m going to move IKOFX from our Mediterranean grouping to our Caribbean grouping, and list them as IKOFX (British Virgin Islands). This is subject to further change, depending on what we find out when we contact this broker directly.
I am going to remove [B]FXVV Capital Markets Ltd (United Arab Emirates)[/B] from our List.
To the best of my knowledge, this broker no longer exists.
Note that I am not moving them from Group 1 to Group 2, but instead eliminating them completely.
For a couple of years, we have listed FXVV in Group 1 under the Mediterranean / Middle East / Africa heading, as follows:
• FXVV Capital Markets Ltd (UAE ?) — not regulated — exercise extra due diligence —
— see posts #1477, #1478, #1486, #1582, #1822, #1833, and #1834 for more info
Platform: MT4. – Min. initial deposit: 10 USD. – Max. leverage: 1,000:1 for account balance up to 1,000 USD. –
– Spreads: EUR/USD 1.5 pips (+ commission 8 USD per std lot), GBP/JPY _______ (+ commission 8 USD per std lot).
Website: Home | FXVV Capital Markets Ltd - Forex, Online Trading, ECN Forex Broker
Email addresses: not published — Tel: +971 4374 1436 customer support (UAE)
The website in the FXVV listing (above) no longer exists. And no other FXVV website comes up when you do an internet search.
If anyone has additional information regarding the current status of this broker, please post it here.
In the meantime, I will change the listing for this broker to read as follows:
• FXVV Capital Markets Ltd (UAE) — removed from this List — see post #2208 for additional info
Sad news. Pellucid FX went belly up. All accounts disabled, trades forcibly closed. Their site is unreachable. There are no communications from them of any kind. So far looks pretty bad in terms of retrieving funds from them.
Thanks for this update. I will remove Pellucid from our List.
If you come upon any further information regarding this broker, please share it here.
One of the account holders at Pellucid posted this at another blog:
Hi everyone, I also had an account with Pellucid FX. Over the weekend they disabled my account, closed all running trades without my knowledge, and have sent an e-mail stating they have been shut down and are being liquidated. The e-mail states that I will hear from the liquidator regarding getting my funds back. That is the only information they have given, and this should explain why their website is no longer working. I’m not holding my breath on getting my money back, but does anyone on here know of anything that can be done? Thanks.
Here is the e-mail:
Dear client,
"We are sorry to inform you that PellucidFX has been shut down and is currently in the process of being liquidated. The liquidator will be contacting you with regards to getting your funds back. Unfortunately this is all of the information we can provide at this time.
“Support Team”
Thanks, Lshap.
By the way — Welcome to Babypips, and welcome to this thread.
WARNING: LIBRA FX CONTACT ADDRESS IS SAME AS PELLUCIDFX
Hi,
I traded with Pellucid from February- April, when I made my first withdrawal there were major issues with cc processors and bank wires. Took 3 weeks, but I did receive my funds. In my search for a new broker, came accross LibraFX and their website looked strikingly familiar to PellucidFX. Checked the contact us tab, and sure enough the address is exactly the same as PellucidFX.
Forgive the double post, wasn’t sure if first one went through.
Can you recommend broker fo us resident that would be good for scalping and session trading. Fast executions and good spread.
I guess it’s best to try first, do any have small min and decent leverage.
I been spending hours and hrs searching.
Try Tradersway, Metals maven. I just trade 1 or 5 minute spikes from economic report releases.