To export your trades for itemization use my account reports and export to vs or excel. Then format them to match your accounting software for import for the format needed.
Nadex 1256 Tax Treatment?
donaldavid
#22
I found this on Green’s website, it seems to explain things quite well. Tax Treatment for Swaps - GreenTraderTax Blog http://www.greencompany.com/blog/index.php?postid=166 You can also get a 30 min. consultation for $150.00
s_mark220
#23
“It seems that makes it ordinary income(loss)? And the $3,000 loss limit doesn’t apply to ordinary loss, does it?” 
http://apexinvesting.net/forum/brokers-118/nadex-1256-tax-treatment-125-page2.html#post3816
[quote=donaldavid]I found this on Green’s website, it seems to explain things quite well. Tax Treatment for Swaps - GreenTraderTax Blog http://www.greencompany.com/blog/index.php?postid=166 You can also get a 30 min. consultation for $150.00[/quote]
darrell
#24
Correct you can search section 409 topic to get the info on the $3,000 loss carry over rule information.
1256 losses can be carried backwards 3 years but not forwards.
This is where the confusion and debate lies…
“A swap is an agreement between two parties to exchange sequences of cash flows for a set period of time.” All the forex spreads expire within 1 day so there is no swap of cash flow even possible on the forex rollover for interest swap. A majority of the binaires expires within 1 day or less so even though they do trade on a product that may have swap interest ie like forex most of them do not even have the ability to have that part of the pricing model.
There is no set of cash flows. There is no interest rate on bonds or currency swap interest rates. So it is difficult to see why they are classified as swaps.
Another issue is that the purpose of 1256 is for instruments that have very little opportunity for long term (12 month capital gains) ie futures expired monthly quarterly etc… The other issue is that there is no opportunity for long term capital gain treatment as all spreads are less than 23 hours and all binaries are less than one week from open to expiration. So why are they not 1256. Reading the definition of 1256 above it seems like it literally perfectly defines Nadex contracts.
The commodities and indices themselves do not have a cash flow sequences as that is not how they work so the spreads and binaries are difficult to classify as a swap.
The CME is going to offer futures tied to interest rate swaps and it makes sense that since it is a derivative of a instrument that has a swap model and can be carried over time for that swap model that those would be considered swap classified instruments and though its not clear it would make sense that these will most likely and should most likely not be counted as 1256.
Bottom line however is that until someone challenges the classification and definition the safer route is to simply file as long term capital gains.
Fortunately one could simply use simple line reporting as noted by the article below using Section 988 (this is not advice seek out a CPA such as Greencompany.com for clarification).
You can file as a company, a trader, or a individual. There are reasons and benefits of each model. If business expenses (platforms, books, fees, education, travel, subscriptions, etc. relating to trading business) is a concern then you may want to seek out more advanced methods such as trading as an entity. Green can help you with this as well.
[quote=donaldavid]I found this on Green’s website, it seems to explain things quite well. Tax Treatment for Swaps - GreenTraderTax Blog http://www.greencompany.com/blog/index.php?postid=166 You can also get a 30 min. consultation for $150.00[/quote]
shane11
#25
Can anyone recommend good tax attorney’s or accountants? I’m more concerned about next years filing.
darrell
#26
We don’t make legal financial account recommendations…
That being said one CPA who is very familiar with all things trading is: GREEN TRADER TAX http://greencompany.com/
theedge987
#27
this is the latest info I could find on Nadex binary tax treatment. Tax treatment for Nadex binary options - GreenTraderTax Blog http://www.greencompany.com/blog/index.php?postid=223
remote_joe
#28
Here is the best article I have found…
https://greentradertax.com/tax-treatment-for-nadex-binary-options/
from what I gather in reading the article is that we are now subject Capital Gains taxes courtesy of those assholes Frank & Dodd.
Darrell did you ever get them to do a webinar on this?
mishmish
#30
Seems to me that capital gains tax is an advantage (lower rate) rather than a disadvantage. Of course, no tax would be best
blackadder
#31
This is one of those things that nadex should have clear instructions of on their website… but they do love to make things harder than they need to be.