How to calculate taxing income from forex trading?

<p id="isPasted">For tax purposes, forex options and futures contracts are considered IRC Section 1256 contracts. These are subject to a 60/40 tax consideration, which means the first 60% of gains or losses are counted as long-term capital gains or losses, while the remaining 40% are counted as short-term.</p><p>A 60/40 tax treatment is often favorable for individuals in higher income tax brackets. For example, the proceeds of stocks sold within one year of their purchase are considered short-term capital gains and are always taxed at the same rate as the investor's ordinary income. The maximum tax rate for ordinary income or short-term capital gains is 37%. The maximum long-term capital gains rate, however, is only 20%.</p><p>When trading futures or options, including forex, investors are effectively taxed at the maximum long-term capital gains rate on 60% of gains or losses and the maximum short-term capital gains rate on the other 40%.</p><p id="isPasted"><br></p><p><strong>Taxes on Forex Options and Futures Contracts</strong></p><p>% of Gains or Losses &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Treated As... &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Tax Rate&nbsp;</p><ul><li>first 60% &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; long-term capital gains or losses &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;20%</li><li>remaining 40% &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; short-term capital gains or losses &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; 37%</li></ul>