Hi. This is my first post. I'm not even sure if I should be posting here because I am a forex investor, not a trader. I have given a kick-ass trader the POA to trade for me. And I have to admit I am really a dummy in this area.

Anyway, I have seen it stated many times on this forum by GreenTrader Tax that forex income/loss is reported on line 21 (other income) of the 1040.

However, I found the following text here:http://www.forexforays.com/labels/Taxes.html

"....I got to the IRS employee with all the investment answers. I described my forex trading activity and the 1099-B form I'd received, and his answer was unambiguous: report the gains on Schedule D. Report them as short-term gains. Pay taxes at the short-term gain rate. Describe them as gains from currency investments. End of story."

I have also read in other places that you should report the income on line 21, form 1040, *and* in yet other places, you should do the Schedule D thing.

So does anyone know what is really the correct thing to do? It sounds like you could get away with doing it either way. I just want to pay as little tax as is humanly possible.

Thanks for any help you can give.

PS...If you report on the Schedule D, what are you supposed to put in columns b, c, d, and e?