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You may have seen this NEWS ITEM from [I]Finance Magnates[/I] —
CySEC Temporarily Suspends CIF License of FXFINPRO Capital
Do not confuse this Cyprus broker with Finpro Trading (UK), one of the brokers in Group 1 of our List.
FXFINPRO Capital (Cyprus) is owned and operated by PFX Financial Professionals Ltd (Cyprus)
Finpro Trading (UK), our Group 1 broker, is owned and operated by Finvasia Group.
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Hello everyone. I have been reading a large portion of this thread and have enjoyed it thoroughly. However, even after digesting a lot of the information presented here, I have a few questions about taxation.
I understand that forex can be taxed under Section 988 or Section 1256 based on an election that you can internally do. I also understand that the FBAR form, now called the FinCEN Report 114, should only be filed in the total amount of foreign assets that you own is above $10,000 at any point during the tax year.
My current situation (the one that I will be using for the 2016 tax year) is Section 988. I have a SMALL tax loss and I just wanted to ask whether or not there is anything special that should be included in a tax return that includes trades from a foreign forex broker?
Do statements need to be sent to the IRS? Do you have to provide any other type of evidence? Do you simply write in the loss on an aggregate tax year basis and that is all?
I would really appreciate insight into the preparation of tax documents for foreign forex brokers.
Thank you all and anyone that wants to answer is more than welcome 
Just save a digital copy and also a printed version of your trading account statements for the year by downloading them from the PC version of the Metatrader platform and keep them filed in the event of an audit. If you do your taxes with a CPA, then provide him copies. If you do TurboTax or similar, keep them for around 7 years or so until the statute of limitations for audits passes. I have not provided any proof and I was profitable last year. I simply entered the amount I made less commissions/swaps and paid my taxes. Should be the same for your loss that you are claiming.
Thank you for the helpful information. Just wanted to ask the following to be sure: The process you explained above would be the same regardless of whether you have a foreign broker of not right?
In essence, under section 988 you will always like the aggregate income/loss regardless of whether you have a domestic or foreign account. The only thing that is different about foreign accounts is the FBAR, which is only important if assets in that year ever went over the $10K mark. Am I correct in assuming these points?
Thank you again for the comments.
In my experience (and to clarify, I never used 988) I treated all of my foreign and domestic forex accounts in the very same way on my taxes. Not one difference. I put my Alpari losses, my Tradersway losses, ForexFS losses all on the same form and entered each one exactly the same way. The only difference is that when my Tradersway account went above $10,000 in 2015 and also in 2016 I filed the FBAR, which goes to the Treasury, not the IRS. In 2015, my Forex.com gains, AssetsFX losses and Tradersway gains were again entered on the same form. It was nice because I was able to deduct my losses from 2014 to offset the gains in 2015.
One thing you should not do: Don’t decide that all of your years with a loss will go on form 988 and all of your years with a gain will go on 1256. The IRS is not stupid and you will be in trouble. My intention in 2013 was to continue trading and be profitable in the future, so I put my 2013 losses on 1256. I was not profitable in 2014 neither so I again put them on 1256. I then used those to offset 2015.
I’m not the one to say I told you so, but:
[emphasis mine]
also [B]this post on a longer term offshore solution[/B] which is too long to quote here.
Thank you so much tomd100 for the valuable information. I will take this all into account when doing my taxes this year and thank you for alleviating any worries that I had.
Britain joins the
Organization of Nanny States
(ONS)
Articles from Finance Magnates —
Breaking: FCA to Ban All Bonuses, Proposes 1:50 Leverage Cap
FCA Proposed FX Restrictions Decimate CMC, IG and Plus500 Shares
Exclusive: Industry Responds to FCA’s Proposed Changes for Forex and CFDs Firms
:42:
We invite traders in the U.K. who seek and demand FINANCIAL FREEDOM to join us here,
as we search out and support OFFSHORE BROKERS who refuse to knuckle under to
the World Forex Police (CFTC) or the Nanny States they intimidate and control.
:42:
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You’re welcome buddy
Looks like the UK will become the new US with respect to FX. Hopefully it doesn’t become that way but I second Clint’s statement; let’s join together and continue to fight!
Sorry if it was covered recently, but does anyone actually use [B]Real Trade[/B]? They always seemed fishy to me with their website that reminds me of the dial-up/America Online ERA from the late 90s. They list PayPal as a deposit method still and are just plain weird when compared to any of the others. I had emailed them early in 2015 to get info from them but they didn’t reply. Do they actually operate and actively accept clients?
Good questions, Tom.
We should take a look at this broker and decide whether they deserve to remain on our List.
One thing I just discovered visiting their website:
They appear to have no presence in Seychelles (where we have been listing them). On their “Contacts” page, their principal place of registration now appears to be British Virgin Islands, with a London phone number indicating that their physical location is actually in the U.K.
In addition to the BVI mail-drop, Real Trade also lists “Partners” in Lithuania, Estonia and Latvia, and these “partners” bear the Real Trade label, so what does that mean? branch offices? subsidiaries? or just IB’s?
Do we need to keep Real Trade on our List?
What do you guys think? — Please weigh in.
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what do you guys think about FxCHOICE?
another question, do any of you experience slow server issue with trader was? especially in demo
Have you read the first 7 posts in this thread?
Are you aware that we have designated [B]FX Choice[/B] as one of our Trusted Brokers?
In post #7, you will find LINKS to more than 10 of the most recent comments posted in this thread regarding FX Choice — which should answer your first question.
I presume you are asking about [B]Trader’s Way,[/B] our other Trusted Broker. Am I right?
Again, refer to post #7, where you will find LINKS to more than 2 dozen comments about Trader’s Way posted by participants in this thread.
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I saw FxGlory on the first list. That is nice.I have been using this broker since 2014 and I am satisfied with their services.
Welcome to this thread, Thomas.
I noticed that you have taken some abuse on another thread for your support of [B]FXGlory.[/B] You won’t face that sort of treatment here on this thread, as long as you’re straight-forward with us.
So, tell us a little about yourself, and let’s talk about FXGlory.
Where do you live? Which FXGlory branch do you deal with? Are you associated with FXGlory in any way [I]other than[/I] as a retail customer? Why do you think FXGlory has gotten so much bad publicity on this site, and on other sites?
Here on this thread, we’ve had only one substantive comment on FXGlory in the years that they’ve been on our Offshore Broker List, and it was a sharply negative comment, posted almost 2 years ago.
Apparently, there have been a lot of developments at FXGlory since that comment was posted. So, it should be informative to have you here to contribute some first-hand information.
While reading the fine print on the FXGlory website, I noticed that they have recently expanded into St. Vincent and the Grenadines. The Caribbean region in general, and SVG in particular, have become popular domiciles for forex brokers seeking to locate in jurisdictions where they can deal with U.S. residents, free (or relatively so) from the nazis at the CFTC. Do you know anything about FXGlory’s move into SVG?
Write back soon, and tell us what you know about FXGlory — and more about yourself.
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I can weigh in.
Definitely. [B]Trader’s Way[/B] has higher latencies than other ones I have used (like [B]AssetsFX[/B], which had the lowest). It seems that they do not maintain any servers at all in North America. I recall seeing some other broker with a server in Canada a couple of years back but I don’t remember which one. I figure it is for good reason - to keep all all business structure outside of the US/Canada. However it seems like most other brokers have an NY4 datacenter server or something similar and they have not had any issues (knock on wood of course), so I am not sure if maintaining a server within a certain jurisdiction is dangerous or not.
Anyway, yeah while the slow server thing isn’t an actual issue, it is annoying sometimes.
Amid the FCA’s continuing efforts to cripple retail forex trading in the U.K.,
brokers there contemplate massive cuts to their London workforce,
and consider moving their corporate headquarters to the E.U.
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To our broker-friends in London:
If Germany doesn’t work out for you guys,
take a look at the Caribbean region.
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[quote=“Clint,post:4111,topic:35612”]
Welcome to this thread, Thomas.
So, tell us a little about yourself, and let’s talk about FXGlory.
Where do you live? Which FXGlory branch do you deal with? Are you associated with FXGlory in any way [I]other than[/I] as a retail customer? Why do you think FXGlory has gotten so much bad publicity on this site, and on other sites?
Write back soon, and tell us what you know about FXGlory — and more about yourself.[/QUOTE]
No comment, Thomas?
Nothing, at all?
What are we to make of that?
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Yeah so far he has only posted in defense of [B]FxGlory[/B] in another thread along with a couple of short compliments to other forum members, such as “I like your analysis”.
Says he is online now, so maybe he will surprise us and not be the James Bond of [B]FxGlory[/B] public relations.