Interactive Brokers and Tax

As a relatively new person trading on the US market with IB, and coming up to the end of the financial year here, I was wondering how to handle my tax return in regards to trading US options.

These are my main questions:
1. Is there a requirement to submit a US tax report at the end of their tax year?
2. Does IB provide a report at the end of our tax year?
3. If so is this sufficient for all tax calculations?
4. Will I have to use the ATO exchange rates for each transaction as it occurs?
5. Basically what process or program do you use when it comes to tax time?

Any help would be fantastic.

Cheers.

You would/should of signed a Tax treaty form when you opened the account so you don't need to pay US tax.

On the question about about P&L I flatten all foreign currencies as the last trade of each month and use that P&L as my monthly reported P&L

I am the developer of the software TradingDiary Pro. As far as I know you have to convert back each trade to AUD and then calculate the P&L (one of our Australian users has already asked for this calculation method). If your base currency is AUD at IB you can use our software to create a capital gains report because IB reports conversion rates to base currency in its statements.
Regards

I'll cover some ground already answered but in answer to your questions:
1. Australia and USA have a tax treaty. Assuming you made the necessary declarations when you joined IB - and its hard not to - you won't have to lodge a US return. Witholding tax will be deducted from US dividends. Your Australian tax return declares dividends, relevant witholding tax as well as capital gains/losses
2. Yes - very detailed.
3. It should be although I prefer to keep track progressively. Using AU$ as the base currency makes it much easier as all conversions are done by IB.
4. See '3' above. Otherwise, I'd seek professional advice. The ATO has a good advice site.
5. A lot depends on how many transactions you have, what base currency you use, how hands-on you want to be etc. IMO some otherwise good Australian programs don't handle multiple currencies very well or at all. My preference is to let the software take care of the recording so I can spend my time on the trading aspect. I have found Trading Diary Pro suits my needs. I also like but don't use Personal Stock Monitor Gold (both have pros and cons). Others find spreadsheets meet their needs.

A bit long winded but hope it helps.

lethal36 said:

..................
These are my main questions:
1. Is there a requirement to submit a US tax report at the end of their tax year?
2. Does IB provide a report at the end of our tax year?
3. If so is this sufficient for all tax calculations?
4. Will I have to use the ATO exchange rates for each transaction as it occurs?
5. Basically what process or program do you use when it comes to tax time?.........

Click to expand...