LD Lossdog Research
topic

tax

6 matching records.

Insight

Tax Considerations for Futures Profits

When calculating taxes on futures profits, a general rule of thumb is to allocate 20% of the profit to long-term gains and the remaining 80% to ordinary income. This allocation is based on the tax bracket of the individual. However, the actual tax rate may vary depending on the individual's tax bracket and state taxes. It is recommended to consult with an accountant for accurate calculations.

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Applicable when
  • futures trading
  • tax bracket
  • profit allocation
Limitations
  • This is a general guideline and may not apply to all situations
  • State taxes are not included in the calculation
  • Consulting an accountant is recommended for accurate tax planning
tax
high confidenceVerify in video at 11:11 ↗
Insight

Tax Treatment of Options vs. Stocks

Options profits are generally treated as ordinary income, unlike long-term capital gains for stocks. The speaker emphasizes that tax considerations should not influence trading decisions, as they are not tax experts. They suggest that traders should focus on their trading strategy rather than tax implications, and note that certain countries offer more favorable tax treatments for specific instruments like CFDs.

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Applicable when
  • trading options
  • tax implications
Limitations
  • The speaker is not a tax expert
  • Tax laws vary by jurisdiction
  • The advice is general and not tailored to individual circumstances
tax
high confidenceVerify in video at 05:51 ↗
Q&A

What is a quick and dirty math to hold back for taxes if you have a hundred thousand dollar profit in futures?

A general rule of thumb is to allocate 20% of the profit to long-term gains and the remaining 80% to ordinary income. This allocation is based on the tax bracket of the individual. However, the actual tax rate may vary depending on the individual's tax bracket and state taxes.

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Actionable takeawayUse the 20% long-term gains and 80% ordinary income allocation as a general guideline for tax purposes, but consult with an accountant for accurate calculations.
futurestax
high confidenceVerify in video at 11:11 ↗
Q&A

Do you consider wash sales? Do you have a lot of them? Do Does it factor into your trading?

The speaker states that they never consider wash sales and that the technology used by tax clearing firms now offsets all potential buys and sells, making wash sales irrelevant in option trading.

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Actionable takeawayWash sales are not a concern in option trading due to technological advancements that offset potential wash sales.
taxTrading Strategy
high confidenceVerify in video at 07:25 ↗
Q&A

Why do you recommend options with the unfavorable tax treatment of the wash sale rules which significantly eat into profits?

The speaker clarifies that options profits are generally treated as ordinary income, and there are no unfavorable tax treatments with the wash sale rules when it comes to option profits. They suggest that traders should focus on their trading strategy rather than tax implications.

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Actionable takeawayOptions profits are generally treated as ordinary income, and there are no unfavorable tax treatments with the wash sale rules when it comes to option profits.
optionstax
high confidenceVerify in video at 05:51 ↗
Q&A

That is the most I want to sell on Nvidia this year for tax purposes.

Roll calls forward to avoid assignment risk and large tax bill.

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Actionable takeawayRoll calls forward to avoid assignment risk and large tax bill.
NVDAoptionstaxTrading Strategy
high confidenceVerify in video at 37:57 ↗