I have a forex loss of around 20K and I have been reading up in this forum and else where that I can report this on line 21 of 1040, however my CPA who is doing my taxes (he has no idea of forex) insists line 21 can only take loss of 3000 and have to forward the remaining losses to next year. He has completed a schedule D and on line 16 of schedule D he has put a total of 20000 in losses and then in line 21 of schedule D he put -3000. Is this correct? I checked the Schedule D and it seems he is right, the line clearly states it should be the lesser of line 16 or $3000 (treat both numbers as positive even if loss), so in my case he put $3000 in line 21. But should he be filling Schedule D for forex trades? And if so is the correct way to do it? He has left form 1040 line 21 empty.

If I can report the entire amount as a loss for year 2006 then I can get some money back from my taxes to offset my huge loss.

Please help me, any assitance is appreciated.

Thanks,

- Philips.

Line 21 of Form 1040 has no loss limitations on ordinary losses.

Schedule D capital gains and losses has a loss limitation of $3,000 per year for individuals.

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Hello gurus,

I read all this forum and still am not clear how to report what I have. First of all I am not doing FOREX anymore and I did not have any open position as of december 2007. So, I did receive 1099-B form from my broker reporting an aggregate loss of $220 something. So, but I cannot enter a negative amount on line 21 of form 1040. I am using HR Block online tax prep software, and it only let's me input 0 or greater amount on that line. What else can I do?
Also, do I still need to do schedule D as well?

Thanks,
Andy

read our latest content page with more info on tax reporting.

http://www.greencompany.com/Educatio...Currency.shtml

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yes, I read it...I did not find an answer to my question on your page.

Hello,
I gave my funds to my father to manage past year. Since he is not registed money manager and it was easier for him to manage consolidated account we pooled our money into one.
Unfortunately, he ended up with a loss. Can I report my portion lost as ordinary loss on my tax return (obviously assuming he doesn't report it)?

Also do I need to submit any additional forms explaining this ordinary loss.

thank you in advance

Line 21 is for income not reported elsewhere. The loss shown on your 1099-B is a short term capital loss and is reported on Schedule-D and line 13.

forex loss is not capital loss unless a trader filed the "capital gains" election.

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Agree with you !

Hello everyone, sorry to just drop in on this topic but I'm in need of dire help. I'm a college student who is in desperate need for financial aid, and the FAFSA application required for aid has a calculation method which ignoring assets when calculating Expected Family Contributions. This method called simplified needs and requires a 1040a tax form, therefore no capital gains, and me and my parents both lost a couple of thousand through ForexTrader, which is what you guys call spot trading I guess.

I really know nothing about taxes, but is there a way to still do the 1040a simplified tax form when there has been forex losses?