Section 988.

Section 988 is a section of the US tax code that deals with foreign currency transactions. It was added to the tax code in 1978 in order to prevent US taxpayers from using foreign currency to avoid paying taxes.

Under Section 988, any gain or loss from a foreign currency transaction is treated as a capital gain or loss. This means that it is taxed at the same rate as other capital gains, which is currently 20%.

There are a few exceptions to this rule. For example, gains and losses from certain hedging transactions are not subject to taxation under Section 988. How do I opt out of Section 988? To opt out of Section 988, you must file a notice with the IRS within 30 days of the date of your trade. The notice must state that you are opting out of Section 988 and must be signed by all parties to the trade. How do I report a section 988 gain? To report a section 988 gain, you will need to file a Form 1040 for your individual taxes. On this form, you will report your total income, which will include your section 988 gain. You will then calculate your taxes owed, and send in your payment to the IRS. Is Section 988 an ordinary income? Yes, section 988 is an ordinary income. This is because section 988 covers any foreign currency gain or loss. How is Section 988 income taxed? Section 988 income is taxed as ordinary income. This means that the tax rate will be the same as your marginal tax rate. Is Section 988 gain passive? No, Section 988 gain is not passive.