Tax implication of Trading Forex
I hope Andrei doesn’t mind that I post his comment on the front page. I think it provides some good insight on the tax implications of trading currencies:
"On the issue of taxes… I recently discussed this with my tax advisor. One book I read recommened incorporating, as then you don’t take your profits on Sched. D as a capital gain, but rather pay yourself a salary for your trading time. If you ever want to leave an inheritance for someone, you issue them non-voting "shares" in the company instead. Sounded great in principle, but my advisor said a client of her’s just got snagged with a surprise $70,000 bill from the IRS using this method."
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