Tax Treatment & Rules

How can I select a tax lot for a closing trade? (FIFO & LIFO)
As “cute” as FIFO & LIFO may sound, they are not the names of stuffed animals. Instead, they are more commonly referred to as “First-In-First-Out” or “L...
What is a Wash Sale and how does it affect my taxes?
A wash sale, in a nutshell, is a rule created by the IRS (Publication 550) that prevents investors from forming artificial losses. There are some things to ...
How is my Cost Basis Reported?
Any security purchased at tastyworks will be listed in Form 8949, which is included in your Consolidated Form 1099-B. Your tax forms may also contain any ad...
How are exercises, assignments, and rolling trades taxed?
Tax Treatment for Exercise, Assignments, and Rolling Trades Booking profits or losses from buying to close a short position or selling to close a long posi...
What is Short-Term & Long-Term Capital Gains/Losses and 1256 Contracts?
Tax treatment for short-term capital gains/losses is considerably different from long-term capital gains/losses. Let’s break down what defines a short-term ...
How are Dividends Taxed?
When it comes to owning stock, everyone deserves his or her slice of the pie in the form of a dividend, but that’s if the company pays one. Dividends come i...
How are referral credits taxed?
Whether you redeem your referral credits for cash award(s) or prize item(s), both are subject to taxes. That means if you received a cash reward(s), a prize...
How can futures settlement affect my taxes?
Futures are a different animal. Futures and options on futures are mark-to-market each day based on the settlement price, or in other words, they are Sectio...
How can I make a Mark-to-Market election to my account? (trader status)
The number 475(f) may mean nothing to you, but in the eyes of the IRS, it is a specific tax classification for traders. Although you may believe that you ar...
What is the 390 Professional Orders Rule (“390 Rule”)?
What does the number 390 and a regular trading day have in common? Oddly enough, a lot. It is the number of minutes in an ordinary trading day (8:30 am to 3...