Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose.

Tax Information

How do I report my income from Forex transactions?

You can elect to have Forex income taxed under Internal Revenue Code Section 988 or Section 1256. You must make your election as of January 1 for the coming year or all Forex earnings automatically fall under Section 988.

The Section 988 rules define all gains or losses from currency trading as ordinary income or losses.

The Section 1256 rules define that 60 percent of the income is treated as a long-term capital gain and taxed at a lower rate than ordinary income. The remaining 40 percent is considered ordinary income.

The information above is general guidance and may not apply to your specific situation. If you have any questions regarding your personal tax election, please consult a tax professional or the IRS.

What documents do I need in order to report my income from Forex transactions?

In order to report your income from Forex transactions on your annual tax return, you will need the following documents:

  1. Annual Statement for the year ending December 31 – This statement will summarize all transactions and provide detailed account activity.
  2. Daily Statement from December 31 – This is only applicable for clients with open positions as of December 31. This document will provide you with an account summary detailing total funds, open profit and loss, as well as a position summary and trade recap.

How do I obtain my Annual Statement?

All IG clients who have a transaction in the prior year will receive an Annual Statement via e-mail by the end of January. You can also log into My IG and download your Annual Statement directly from the “Statements” section.

How do I obtain my Daily Statement as of December 31?

Daily Statements are located in the “Statements” section of your My IG portal.

Daily Statements are only generated for clients with open positions on the specific day in question. Therefore, if a client has no open positions at the close of business on December 31, no Daily Statement will be available for download.

Will I receive an IRS Form 1099-B from IG?

IG is not required, under its registration as a Retail Foreign Exchange Dealer with the National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC), to provide clients with an IRS Form 1099-B. IG clients will receive an Annual Statement and a December 31 Daily Statement, if applicable, to use as sources for tax preparation.

IG and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Clients should consult their own tax, legal and accounting advisors for additional assistance.

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