Update 2014 Tax Information for Futures Trading

1. Update 2014 Tax Information for Futures Trading Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

2. Richard Roscelli Great Pacific Trading Company Grants Pass Oregon- Las Vegas Nevada • rroscelli@gptc.com- for information on Futures Trading • rroscelli@greatpacificwealth.com- for information on Great Pacific’s managed futures programs 1-877-270-8403 702 463-0718 702-605-4112-Direct/Skype Twitter @richardroscelli Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.

3. Richard Roscelli Great Pacific Trading Company Bio of Richard Roscelli • 19 years in the financial industry • Co Branch Manager of Las Vegas branch Great Pacific Trading Co. • Prior Analyst & Manager of International Trading Desk for Institutions and CTA’s • MBA in Global Business • Featured Contributor & Analyst to Futures Magazine, Traders Planet, numerous trading & alternative assets websites Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.

4. WEBINAR DISCLAIMER… • Trading futures and options involves substantial risk of loss and is not suitable for all investors.  An investor could lose more than the original investment. • Past performance is not necessarily indicative of future results. • Any decision to purchase or sell as aresult of the opinions expressed in this report will be the full responsibility of the person authorizing such a transaction.

5. ADDITIONAL DISCLAIMER-VERY IMPORTANT! • The information presented in this webinar has been complied and prepared from sources believed to be reliable and accurate at the time of creation. • Commodity Trading School and Great Pacific Trading Company are offering this webinar purely for information and education purposes. • None of the individuals involved in the preparation of this presentation are licensed CPA’s, tax professionals or legal consul. • This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA. • Any financial or tax strategy decisions made as a result of the information contained in this report will be the full responsibility of the individual or entity duly authorized to make such decisions.

6. Any reproduction or rebroadcast with out the express written consent of the Commodity Trading School is strictly prohibited.

7. 2013 -A brand new tax ballgame • On January 1st 2013, a compromise deal was struck between the US House of Representatives and the Senate to ward off what many considered the most economically damaging elements of the expiring Bush Era tax cuts as well as mandatory spending cuts that would affect multitudes of programs throughout the US government. • In summary, the deal preserved US federal tax rates at 2012 levels except for individuals earning more than $400000 & households earning more than $450000. The rates on capital gains and dividends were also increases for certain brackets as well. • “Info courtesy of www.nbc.com/nbcpolitics 1/02/2013 Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

8. So the $400,000/$450,000 questions??? • Will Uncle Sam be taking a bigger cut of gains from trading futures?!!!! How does the 2013 Fiscal Cliff deal affect the taxation of futures? Did the “60/40” split rule on gains for futures change? Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

9. Let us tackle some of these questions now!!! • The following question & answer presentation is a followup to the 2013 “Fiscal Cliff “ tax changes webinar. The primary change in this presentation is an updated chart that contains the 2014 tax brackets. • Again, it is essential to review any and all changes to the tax laws and codes with your tax preparer or a certified tax professional. Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

10. Question 1. How did the 2013 fiscal deal change the tax treatment of commodity futures? • As with most financial instruments, the tax rates for gains from futures trading increased for higher net worth individuals. • In addition, those with incomes over a certain amount will have an additional 3.8% Medicare tax added to their rate bracket. Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

11. Question 2. Was the tax treatment of futures contracts (60/40 rule) been changed as a result of the 2013 Fiscal Cliff Deal? • Futures contracts are still treated under the special provision of IRS Section 1256. This allows gains from futures trading to be split under a 60/40 provision. (60% of gains will be taxed under long term capital gains rates and 40% of gains will be taxed under short term capital gains rates). • The rates themselves have been modified under the fiscal cliff deal, increased for higher income individuals and a Medicare tax of 3.8% added to their rate. Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

12. Question 3. What are the income levels where the tax rates on futures have changed? • Income tax rates for three filing statuses: Single, Married, Head of Household have been increased to a top rate of 39.6% • For singles making over $400,000 per year, married $450,000, head of household $425,000 –income tax rates have increased. The 3.8% Medicare tax has also been to these income brackets. These rates are determined based upon the filers AGI (Adjusted Gross Income) Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

13. Question 4. At what income level does the 3.8% Medicare tax come into effect? • Again this depends upon the filing status of the taxpayer. The Medicare tax comes into effect at the 33% AGI income range. For single filers, this range begins at $183, 250, married $223,050, head of household $203,150. Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

14. Question 5. Has the IRS section that governs the tax treatment of futures & similar financial instruments changed? • Futures Contracts are still governed by IRS Section 1256 (maintains 60/40 capital gains rule) Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

15. Question 6. Does the fiscal cliff deal affect the tax deferred status of futures trading within an IRA Account? • Gains from futures trading within an IRA account still maintain their tax deferred status. In the case of a traditional IRA for example, gains are only taxed on withdrawal of proceeds from the IRA. Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

16. Question 7. What are the individual tax rates across all income tax brackets set by the 2013 fiscal cliff deal? • The chart on the following slide contains all the 2013 individual tax brackets, as well as the rates created by IRS Section 1256 (tax treatment of futures). Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

17. Question 7. What are the individual tax rates across all income tax brackets set by the 2013 fiscal cliff deal? Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA. A.

18. Conclusion of 2013 Tax PresentationThis presentation is designed for informational & educational purposes only and should not IN ANY WAY be used as an alternative to seeking the assistance of a qualified tax professional . • The clock is ticking to April 15th. Tax day. • WILL YOU BE READY? • If you are left with as many questions as answers, then this presentation has accomplished one of its main goals. Armed with your questions, engage the services of your tax professional to seek out the proper and legal filing status for your situation.

19. Additional information • Here are some websites that offer further information about today’s topic • www.tradersaccounting.com • www.cmegroup.com • www.irs.gov • www.morningstar.com/cover/videocenter.aspx?id=587068(Morningstar video-A tax primer on alternatives) Trading futures and options involves substantial risk of loss and is not suitable for all investors.  Past performance is not necessarily indicative of future results. This presentation has been designed as a supplemental outline to IRS guidelines and regulations and should not IN ANY WAY be used as an alternative to seeking the assistance and guidance of a licensed tax professional or CPA.

20. Richard Roscelli Great Pacific Trading Company Grants Pass Oregon- Las Vegas Nevada • rroscelli@gptc.com- for information on Futures Trading • rroscelli@greatpacificwealth.com- for information on Great Pacific’s managed futures programs 1-877-270-8403 702-605-4112- R Roscelli Direct/Skype Twitter @richardroscelli Music Beethoven Sonata in D Major Largo…Performed by Mordecai Shehori 1994 Cembal d’amour inc. Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.

21. Thank You for attending this presentation! Remember…A Educated Trader has a better chance to be a Successful Trader! To our existing clients, our thanks. To everyone else, our anticipation to have you join us as a Great Pacific Trading Company client today. Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.