How are binary options taxed in the US?

Any ideas? I can't find any good info on this. Are they subject to being taxed for every winning trade, regardless if you later lose that profit in a subsequent trade, or do you get taxed on the net gains of all your trades for the year?

Options should be taxed the same way with capital gain/ (loss) on stock trading all gaaines after deducted for the losses are to be taxable but you can deduct a maximum of $3,000 of your total "net" loss and the balance is to be carried forward for deductions in the future years.

The least tax advantage in the US is gambling: horse, lottery betting. In these gambling ventures, you have to report all your winnings (less the losses during the year), you can't deduct the "net" loss, which means you can deduct all your losses up to the total gains for the year - you only deduct to the break-even level.

Individual taxpayer is a cash business tax payer, so if your option trading net gain $10,000 this year, you report $10,000 this year, and if your net loss is $10,000 in the following year, you can only deduct $3,000 on your option loss and the $7,000 balance will be forward to be deducted in the future years.

Hope this helps

Thx, but what about CFDs at Nadex? Or spread contracts?

I believe that you have to pay tax since there is no specific provision in the tax laws that provides the tax exemption for those kind of "bettings". I did a preliminary research and found very interesting writing on the issue for the UK traders.

Sorry, I couldn't be any more helpful, if I run across a good answer in the future, I would let you know. And for now, the answer is yet, you have to pay taxes on the gain, the stamp fees should be consider as foreign tax and to be claimed for credit on your U.S. tax return

http://www.financial-spread-betting.com/Tax-free.html

Sorry to have not been more clear. I was referring to Nadex specifically, which is a US operation and CFTC regulated "version" of IGMarkets.

Nadex offers exchange traded options, not CFDs, so the tax will be as for options.

I see so it doesn't matter that they're digital options, they're taxed exactly as vanilla options?

Also nadex has capped futures, how are those taxed? Anyone know.

Which Exchange? NDEX just has the name Exchange in it's name you are dealing witha market maker ...