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Index

Section 1256 Contracts

 
Section 1256 contracts are handled differently than other securities filed on Schedule D. Examples of Section 1256 contracts include future contracts and broad based index options.
 
  • There are no IRS requirements to itemize your futures or broad-based index option trades to file your taxes.
  • The wash sale rule does not apply.
  • Total gain/loss for 1256 contracts is split 60/40 - 40% is considered short term capital gains, 60% is considered long term capital gains.
  • All Section 1256 contracts held open at year end are marked-to-market at fair market value.
  • Section 1256 contracts are reported on Form 6781, with certain totals reported on the Schedule D.
 
Many users have requested to use TradeLog generated reports for reporting Section 1256 contracts. Beginning in version 9.3 of TradeLog MTM only, the proper reports have been made available. Users of TradeLog Trial, 200, 600, 1500 and unlimited will NOT have access to these reports.