Hi, I have an LLC that performs 2 primary activities:
1) Consulting/Software Development Work
2) Automated Forex (currency) trading

Lets say (for example) that I made $40,000 doing the Consulting work and LOST $20,000 doing the Forex Trading.

Can I fully write-off that $20,000 loss and only pay taxes on the $20,000 net? If so, what documentation do I need and where do I put it on my tax form?

Thanks!!

The tax code doesn’t let you mix these. Your business is clearly the software development work. You had income here and when you had contracts you actually worked on them.

Your losing hobby was the forex trading. Most likely these will fall under 1256 rules and be entered on schedule D and limited to $3000 of loss against other income.

I am planning to run an automated forex trading platform hosted on a server outside Singapore. Client’s trading platform will be hosted on the server and trades will be executed on their behalf. Do I need a license and how do I obtain the license?

If you are trading for others, you may need a license based on your countries rules about being an advisor sort of speak. You may want to contact some of your local officals You should be okay if the funds remain in your account.