How does Nadex provide income tax related information?
On an annual basis, Nadex provides Tax information to its members via an IRS Form 1099-B to help you with your income tax compliance requirements. The information provided is based on your activity on Nadex. Nadex’s instruments are considered ‘commodity options’ categorized as ‘swaps’ for regulatory purposes. This may or may not be consistent with the Internal Revenue Service (IRS) categorization for your tax situation. Further, the information contained in the IRS Form 1099-B may not be applicable to or suitable for your specific circumstances or needs, and you may be required to provide other information. Consult your tax advisor before making any filings with the IRS. Nadex does not provide any tax-related advice.
When should I expect to receive my 1099-B?
The IRS Form 1099-B will be available to view and download within the trading platform no later than February 15th each year for the previous year’s trading activity. To view your tax form, log in to the trading platform and navigate to Account > Reporting > Tax Forms. For 1099-B tax forms prior to 2023, please email firstname.lastname@example.org
Understanding your 1099-B
Box 1A – Description of Property – “Regulated Futures/Options” – contracts traded on North American Derivatives Exchange.
Box 8 – Profit or (loss) realized on closed contracts.
Box 9 – Unrealized profit or (loss) on open contracts – 12/31 of the prior tax year This will be $0.00 unless you had open contracts on the last business day of the prior tax year.
Box 10 – Unrealized profit or (loss) on open contracts – 12/31 of the current tax year. This will be $0.00 unless you had open contracts on the last business day of the current tax year.
Box 11 – Aggregate profit or (loss) on contracts – The sum of boxes 8, 9, and 10
How do I know whether I had a profit or loss for the year?
A loss is enclosed by parentheses. If the figure in Box 11 is in parentheses, you will report a loss for the year.
What is an unrealized profit or loss?
Profits or losses are realized when a position is closed. Profits and losses are unrealized when a position is open at the end of the year. The unrealized profit or loss is the difference between the value of the position on the last trading day of the year and the cost basis in that position.
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