Tax implications of copy trading in the US
By Artha Labs · June 28, 2026 · 5 min read · Draft
Draft notice
This guide is a working draft. We’re finishing the full version. The outline below shows what’s coming.
This article is a draft. We're working with a CPA to write a complete, accurate version. The short version is below; the full version will land here shortly. None of this is tax advice — talk to a qualified tax professional about your specific situation.
Every trade placed in your brokerage account is a taxable event in the US, whether you placed it yourself or you approved a Pro desk order Artha prepared for you. There is no special "copy-trading" category for tax purposes; the IRS treats the trades exactly as if you'd placed them by hand.
The two things that get most copy-traders into trouble at tax time are short-term capital gains rates (frequent trading means most gains are taxed as ordinary income) and wash-sale rules (taking a loss and re-buying the same security within 30 days disallows the loss). Active copy trading triggers both routinely.
Outline of the full guide
- Short-term vs long-term capital gains for copy trades
- How wash sales work with frequent re-entries
- 1099-B from your broker vs the activity in your Artha feed
- Subscription fees: are they deductible against trading income?
- State tax considerations
- Tools that help (cost-basis software, accountant questionnaires)
- What to ask your CPA in your first meeting
Artha does not generate tax forms; your brokerage does. Your 1099-B will reflect every trade placed in your account, including orders you approved through the Pro desk. Keep a copy of your Artha activity history as well — it helps reconcile what the broker reports.