Taxes on Funded Forex Programs?

Beginner Questions
1

All these funded forex programs out there and I wondered about how taxes work for this.

I mean most of them typically have you trading a demo with a profit split of some sort.

However, your not even trading your own money and technically not even real money because it’s through their system on a demo which they then copy trade somehow.

Anyhow if they do actually end up paying you something it would seem this is just regular income, commission or 1099 sub contract income or something.

However, I don’t think this is considered capital gains of any kind since your never even investing any money except for their fees into the program etc.

What do you think this type of tax or income would be considered ?
Do you see anything wrong with just misc. income or commission or something ?

Just wondering what category someone would put on their tax returns for this type of income or how they might file such an income. ?

Sort of like a non categorized “other” income type or something ? What do you think ?

2

Hey Agent86

I did not quite understand why you say everyone is on a demo, there are some prop firm that on a real account like The5ers

I am self-employed and I calculate this as part of the income of the business.

3

Hi @Agent86

You are paid as an independent contractor, so if your with FTMO and you make say $5000 profit for the month. You will invoice FTMO for 70% of this, which would be $3500 paid to yourself. You will then be responsible for paying your own income tax on this payment, whether that would be as sole trader, or a limited company would be up to yourself.

4

Most likely, this information can be clarified in the tax service.

5

ANy money you make is taxed…but see an accountant.