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Taxes for Traders (US, with International Notes)

Capital gains, cost basis, wash sales, Section 1256, trader tax status, the 475(f) election, options, forex, crypto and prop payouts, then estimated taxes, harvesting, records and audit triggers. Worked numbers, illustrative rates, and a UK, Canada, Australia and EU overview.

Module 1: The basics

Capital gains versus ordinary income, short versus long term, cost basis and lot methods, realized versus unrealized, and how the 1099-B reports it all.

  1. Capital gains vs ordinary income9 min
  2. Short-term vs long-term: counting the holding period8 min
  3. Cost basis and lot methods: FIFO vs specific identification9 min
  4. Realized vs unrealized, the 1099-B and record keeping10 min

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Module 2: Rules that bite active traders

The wash sale rule across accounts and options, the year-end wash trap, Section 1256 contracts and the 60/40 split, mark-to-market and the straddle rules.

  1. The wash sale rule: a 30-day example across accounts and options11 min
  2. The year-end wash trap9 min
  3. Section 1256 contracts and the 60/40 split10 min
  4. Mark-to-market for 1256 contracts and the straddle rules9 min

Take the module quiz

Module 3: Trader tax status and elections

What trader versus investor means to the IRS, the vague tests, what the Section 475(f) election gives and takes, its deadlines, and an overview of entity structures.

  1. Trader vs investor in the eyes of the IRS10 min
  2. The Section 475(f) mark-to-market election11 min
  3. Entity structures: an overview of the options9 min

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Module 4: Asset-specific notes

Options assignment and exercise, forex under Section 988 versus 1256, crypto as property, prop firm payouts as 1099 income, and dividends and qualified status.

  1. Options: how exercise and assignment adjust basis10 min
  2. Forex: Section 988 vs the 1256 election9 min
  3. Crypto is property: swaps, staking, airdrops and tracking11 min
  4. Prop firm payouts, estimated taxes and dividends10 min

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Module 5: Planning and process

Estimated quarterly taxes, tax-loss harvesting without wash sales, record-keeping systems, software versus a trader CPA, international notes, and common audit triggers.

  1. Estimated quarterly taxes9 min
  2. Tax-loss harvesting without wash sales9 min
  3. Record-keeping systems, tax software and the trader CPA9 min
  4. International notes and common audit triggers10 min

Take the module quiz

Educational content, not financial advice.