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Where do I enter Sec 988 losses on individual return?

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Level 1
Sec 988   and currency losses where do they go on 1040?
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6 Replies 6
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Level 15

Generally, you don't because you can't deduct losses that are personal in nature - see §988(e).  Care to provide more info and context?

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Still an AllStar
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Keep reading - 988(e)(3) says that if it's a business or investment transaction, it's not a personal transaction.

Nothing worse than code sections that say "the answer is always X," when some other section says "the answer is not always X." I'm looking at you, entirety of the IRC dealing with partnerships.

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Level 15

Don't disagree with that but that's why we need more info and context, which the OP has yet to provide.

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Still an AllStar
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From a K-1? I personally run them through the 4797, but anything that gets the right treatment (ordinary, non-passive) is acceptable.

If your gross 988 losses (so without netting in the 988 gains) are in excess of $50k, it's a reportable transaction and needs special disclosure.

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Level 15

@PhoebeRoberts wrote:

From a K-1? I personally run them through the 4797, but anything that gets the right treatment (ordinary, non-passive) is acceptable.


Think the OP says currency loss, which would make that personal, prima facie.  Hopefully, the OP will come back to clarify.

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Still an AllStar
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988 covers currency losses in general. Hedge fund / fund of funds K-1s use both terms interchangeably. 

Only personal 988 losses are personal. 

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