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forex summary reporting? forex summary reporting?
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Old 02-22-2007, 09:57 PM
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forex summary reporting?
Summary reporting depends on whether there are 1256 contracts or straddles.

Forex is marked to market if it is a Section 1256 contract. These can be 60/40 or ordinary, depending on various elections. Our article on spot forex indicates that there is a reasonable position to treating spot forex in a major currency (one for which there is a Section 1256 contract) as a type of forward (a 2 day forward is the way one client put it) and therefore eligible for a Section 988(a)(1)(B) election. Note that Section 475 provides that security includes a currency notional principal contract (forex swap) and any derivative contract in a forex swap or any currency, including option, forward, short and any similar financial instrument in a currency. This is confusing, because these are really commodities contract, but Section 475 is drafted very broadly to define as securities what we would consider to be commodities contracts.
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