I actu­al­ly use a non reg­u­lat­ed bro­ker out of pure igno­rance and have access to the total loss amount. Yes, OAN­DA is a Forex and CFD bro­ker and is reg­u­lat­ed by Sec­tion 988 of the inter­nal Rev­enue code. I still treat it as “oth­er income” and pro­vide the -$12,000 in the box cor­rect? I just do this as anoth­er source of income. By default, retail­FOREX traders fall under Sec­tion 988, https://lunarcapital.world/ which cov­ers short-term for­eign exchange­con­tracts like spot FOREX trades.

• By default, retail­FOREX traders fall under Sec­tion 988, which cov­ers short-term for­eign exchange­con­tracts like spot FOREX trades.
• Sec­tion 988 tax­es FOREX gains and loss­es like­or­di­nary income, which is at a high­er rate than the cap­i­tal gains tax for mostearn­ers.
• An advan­tage of Sec­tion 988 treat­ment is that any amount of ordi­nary­in­come can be deduct­ed as a loss, where only $3,000 in cap­i­tal gains loss­es canbe deduct­ed.
• I still treat it as “oth­er income” and pro­vide the -$12,000 in the box cor­rect?
• You would report your for­eign cur­ren­cy loss as a Sec­tion 988 trans­ac­tion  and treat it as an ordi­nary loss in accor­dance with IRS guide­lines.

You would report your for­eign cur­ren­cy loss as a Sec­tion 988 trans­ac­tion  and treat it as an ordi­nary loss in accor­dance with IRS guide­lines. This default­treat­ment of for­eign cur­ren­cy gains is to treat it as ordi­nary income. An advan­tage of Sec­tion 988 treat­ment is that any amount Lunar­Cap­i­tal forex bro­ker of ordi­nary­in­come can be deduct­ed as a loss, where only $3,000 in cap­i­tal gains loss­es canbe deduct­ed. Sec­tion 988 tax­es FOREX gains and loss­es like­or­di­nary income, which is at a high­er rate than the cap­i­tal gains tax for mostearn­ers. Sec­tion 988 gains or loss­es are report­ed on Form 6781. You would report this as oth­er reportable income in Tur­bo Tax.

• This default­treat­ment of for­eign cur­ren­cy gains is to treat it as ordi­nary income.
• By default, retail­FOREX traders fall under Sec­tion 988, which cov­ers short-term for­eign exchange­con­tracts like spot FOREX trades.
• Yes, OAN­DA is a Forex and CFD bro­ker and is reg­u­lat­ed by Sec­tion 988 of the inter­nal Rev­enue code.
• Sec­tion 988 gains or loss­es are report­ed on Form 6781.