okay i understand I have the option to file under section988 or section1256 and i understand the benefits and drawbacks of each but my question is: Am I obligated to file if I dont withdraw from my forex account that has a positive net worth? thanks guys tax season is coming up and I am anxious as I have not withdrawn money yet
Absolutely to not would be tax evasion. After all just because you haven’t withdrawn doesn’t mean your not making mony from what has been earned throughout the year.
Also, I believe technically (at least under 1256) you have to account for the gain/loss on any open position as of year-end.