forex tax rates with IRC 988 versus electing out of IRC 988 for 60/40 treatment

60/40 tax rate treatment is almost always better than ordinary income tax rates. 60/40 also takes advantage of the lower marginal rates, so your assumption Sniper above is a little off.

Both long term and short term (ordinary rates) are subject to graduated rates, so at lower income levels 60/40 is less than the maximum blended rate of 23%; on the same pro-rata reduction basis.

So with gains, it is almost always better to have elected out of IRC 988 on forex trading.

Thanks