What licensing, if any, does my S Corp need to trade forex on margin, while claiming the maximum losses against my gains?
In the United States, an S Corporation engaged in forex trading on margin does not require specific licensing to trade for its own account. However, if the corporation is trading on behalf of others, it may need to register as a Commodity Trading Advisor (CTA) or a Commodity Pool Operator (CPO) with the Commodity Futures Trading Commission (CFTC) and become a member of the National Futures Association (NFA). Regarding tax treatment, S Corporations pass through their income and losses to their shareholders, who then report them on their personal tax returns. To claim the maximum losses against your gains, you should be aware of the following: 1. **Mark-to-Market Election (IRC Section 475(f))**: If you qualify as a trader (as opposed to an investor), you can make a mark-to-market election which allows you to treat increases and decreases in the value of your positions as ordinary gains and losses (without limitation) rather than capital gains and losses. This election must be made by the due date of the prior year's tax return (including extensions). 2. **Capital Loss Limitations**: If you do not make the mark-to-market election, your S Corporation's capital losses are limited to the amount of capital gains, with an additional $3,000 allowed to be passed through to each shareholder to offset against ordinary income on their personal tax returns. 3. **Wash Sale Rule**: Be aware of the wash sale rule, which disallows the deduction
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