Profits, Losses and Taxes

S2 - Steward - Resource Management capital management
1

If I am placing large $ amounts relative to the potential payoffs, how will this influence my taxes at the end of the year?

For example.

  1. 30$/30$ hedge to gain potential 40$. I am spending 60$ to gain 40$.
  2. 40$/40$ hedge to gain potential 20$. I am spending 80$ to gain 20$.

Because from Nadex I receive a “payment” of 100$, does this mean that I am taxed on “100$” amount?

Also what if I made a 1000$ in a year… but I lost it all before the end of the year? I assume taxes apply to all profits (I also understand there are different tax rates, but for now, I’m curious about when profits are simply taxed)

Thanks

2

http://apexinvesting.net/forum/brokers-118/nadex-1256-tax-treatment-125.html#.UmVCpVDYdMY

3

If you make 100 on one trade and lose 60 on another – you made $40

Settlement payout does not mean profit - it is risk + profit on that trade - if combined with other trades its net profit that counts -

Please see the link Mark provided

4

Thanks for the link.

I see so it’s a yearly net. Million dollars gained, then lost would not see any tax at the end of the year. Thanks again.

5

At the end of the year, whatever you gain you’ll be taxed 15% for it. Ex. 2014 profit: $10,000.00 Tax (15%): $1,500.00

That’s on the Federal Level. Not sure about your particular State.