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You may want to get a tax accountant's advice on this whole
problem. The best thing I can think of offhand is to delay
payment of your tax. I don't recall the form # but you can
effectively delay tax payment until August if you file the right
form before April 15 (ask your accountant). At least this will
allow you to budget for your big tax hit.
If it is Futures or options (I think) you can split the liability
between Short and long term 40/60, so the tax total will be less
than you might think as congress has lowered the tax rates
lately.
>Although you will probably be hit with a big tax liability in
the year you
>had the spike, if the following year you have a big loss, you
can refile the
>prior year's return and carry back the current year loss to
offset the big
>hit in the prior year. In effect, commodity tax laws allow you
to do some
>averaging. However, you still have to come up with the cash to
pay the big
>tax bill in the first year even though you will get it back when
you refile
>the next year to carry back losses to winning years.
Patrick White
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