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Old 03-27-2015, 03:41 AM
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Smile forex money

so, my buddy here trades forex, and he does not understand how the whole tax thing works.lets say the whole year he trades forex and does not withdraw the money but just keeps it in his forex account at a broker thats in usa. is any of it taxable if it hasnt been moved to the bank?

and also, lets say he gets audited or something, can the irs seize that money thats in the trading account?

and would they even know that he has money there?
and would they know how much money he has?

I'm asking cause he told me that his broker does not disclose any info to the irs.



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Old 03-27-2015, 10:30 PM
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Originally Posted by taxnewbieYES View Post
so, my buddy here trades forex, and he does not understand how the whole tax thing works.lets say the whole year he trades forex and does not withdraw the money but just keeps it in his forex account at a broker thats in usa. is any of it taxable if it hasnt been moved to the bank?

and also, lets say he gets audited or something, can the irs seize that money thats in the trading account?

and would they even know that he has money there?
and would they know how much money he has?

I'm asking cause he told me that his broker does not disclose any info to the irs.
so, my buddy here trades forex, and he does not understand how the whole tax thing works.lets say the whole year he trades forex and does not withdraw the money but just keeps it in his forex account at a broker thats in usa. is any of it taxable if it hasnt been moved to the bank? =======>>>>>>>>>>it is still taxable as he already realized the gain in the forex transaction;as he is liable for the income, which has not been physically received, but has been credited to the taxpayer's account or otherwise becomes available for him or her to draw upon in the future. most taxpayers who report income and deductions in the year that they are actually paid or received while some accrual basis taxpayers must include in their taxable income any money that they have the right to receive as payment for services, once it has been earned.

and also, lets say he gets audited or something, can the irs seize that money thats in the trading account?===========>not simply he is audited but when he owes unpaid taxes that have been overdue, the IRS can resort to garnishment of his wages/pty,so. yes; Any property subject to forfeiture. the IRS CAN even garnish his Social Security Retirement benefit! This is a relatively new program, though it was apparently authorized under legislation from several years ago; but Part of the individual taxpayer's wages, salary, including fees, bonuses, commissions and similar items and other income, as well as retirement and benefit income, is exempt from levy.

and would they even know that he has money there?
and would they know how much money he has?========>>>basically, if you have failed to pay taxes you owe, the irs will take aggressive action to recover the amount you owe. The IRS has more power than any other creditor in the us, and they will use that power to get taxes people owe. If initial attempts to recover owed taxes are ignored, the IRS will begin wage garnishment. The IRS finds out who your employer/payer is, contacts them and sets up a garnishment.fof example, Employers are required to take the money from your salary before you receive it. If an employer does not remove a portion of your wages to send to the IRS, then the employer is held liable for the amount they did not garnish. In addition to your salary, the IRS can garnish any other income coming to you, including commissions, bonuses, and sometimes retirement or pension funds. the IRS can do this and they will continue to do it until they have received all of the back taxes that you owe. Once an IRS garnishment hits your bank account, you have 21 days to get it released. If you can prove that the IRS garnishment is going to cause you financial hardship, you can act to get the garnishment released. You will have been sent at least five bills including two by certified mail warning of the potential for enforced collection before your account gets to this stage. Now you are the subject of enforced collection action.



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Old 03-28-2015, 02:51 AM
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I understood the whole idea about it being taxable, and can be garnished if the taxes r unpaid,
but if the forex broker does not release any info about how much money the person has, how is IRS going to see that there is profit from trading? Arent they only able to see it when he withdraws the money to the bank account, or am i wrong(meaning they see everything)? or will they only bother if he owes taxes?

he lives with his parents, eats their food, does not have a fancy lifestyle, he has not used any forex money whatsoever, they r just in the broker account, that means that he does not owe any taxes, as he hasnt worked in his life, or received a payment for his services, so does that mean that the irs wont even notice him or am i wrong, meaning they will somehow find out that makes forex money, and just for that sake will take some even tho he did not spend a cent of it?


Last edited by taxnewbieYES : 03-28-2015 at 02:59 AM. Reason: better wording


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Old 03-28-2015, 02:54 AM
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so if he doesnt owe any taxes, they wont even know that he has money in the account right?


Last edited by taxnewbieYES : 03-28-2015 at 02:59 AM.


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Old 03-28-2015, 03:02 AM
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sorry for the confusion, i just dont know how exactly to word the question.



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Old 03-28-2015, 03:04 AM
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Originally Posted by taxnewbieYES View Post
so if he doesnt owe any taxes, they wont even know that he has money in the account right?
of course, in common sense, they are not even interersted in his portfolio accts/bank accts or etc. non of their biz as we know~~



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