How to manually report options credit spreads in turbotax where the form only shows profit or loss realized in closed contracts?Should total proceeds be the profit?

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April 27, 2025
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How to manually report options credit spreads in turbotax where the form only shows profit or loss realized in closed contracts? Note: Turbotax is not picking this 1099-b form up automatically. For each leg/line item, should total proceeds be the value under profit if positive. If positive, the cost basis as zero? Whereas, if negative, the total proceeds zero and the cost basis the negative value as a positive number? For example, here's a zero days to expiration credit spread in my 1099b Option symbol, Profit or loss realized on closed contract XSP 08/28/2024 563.00 C, $ 38.68 XSP 08/28/2024 564.00 C $ (18.32) Should the first sale be: total proceeds: 38.68 cost basis: 0 Should the second sale be total proceeds:0 cost basis: 18.32 Where in that one credit spread i made 38.68 - 18.32 = 20.36

baldietax

are these transactions presented separately in the 1099-B as 'regulated futures contracts' / Section 1256 Option Contracts etc... if so it's possible they should be reported on Form 6781 rather than Schedule D/Form 8949; in TT go to Wages & Income / I'll Choose What I work On / Investment Income - Contracts and Straddles and also check the IRS instructions for Form 6781. Not a CPA and I've only had limited experience in this form but wanted to point you in this direction; I had a few SPY spreads last year which E*Trade reported as Section 1256.

makeitreynesAuthor

I only got a statement for 1099b from charles schwab. No other form. These are for options credit spreads, not futures. I did not get assigned on any since they're cash settled so it should be easier to manually file.

fanfare

Employee

Update:

I just spoke with a turbo tax advisor. They mentioned as long as I don't have wash sales that I should be able to report under 1099-b, under sale section totals.

They advised that I do also have the option of reporting one by one under the 1099-b one by one view, but that it's not required by the IRS.

So simply, I was directed to just do 1099-b sale section totals and just report my year end profit or loss (where total proceeds is my profit, cost basis is 0). If I had a 2024 net loss total proceeds would be 0 and cost basis would be the loss as a positive number

Regarding stock and options, options are covered transactions and the broker reports them for Box A.

Detail Reporting Exception: if you summarize Box A or Box D, Form 8949 is not needed for transactions without adjustments. No mailing is necessary. No attachment is necessary.

As an active investor, be aware that your category Box A or Box D sales without adjustments do not require Form 8949, so there is no reason to import or key in those transactions.
Instead use the "enter a summary" option to put your numbers on Schedule D Line 1a or Line 8a.
No mailing is necessary.

If you have wash sales, it gets more complicated since those adjusted transactions have to be itemized on Form 8949 and the summary totals adjusted accordingly.
Generally you shouldn't see wash sales on spreads unless you trade the same spread frequently in a 60-day period.

@makeitreynes

Mike9241

we don't know what type of options you trade. certain options can be section 1256 contracts

see PUB 550 https://www.irs.gov/forms-pubs/about-publication-550

but then Schwab so have identified them as such and reported accordingly.

there would be a section on your composite 1099 labeled "1256 option activity"

open 1256 contracts, at year-end, are marked-to-market. 1256 contracts are first reported on form 6781 not schedule D. from there the gain loss is split and carried to schedule D

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if you are a trader who has properly elected IRC 475(f) then mark-to-market reporting is required. the gain/loss for the year is ordinary income or loss reported on form 4797 line 10 (including 1256 contracts rather than reporting on form 6781) . if you are a trader who has not elected 475(f) or an investor, each leg that has been closed/expired by year-end is reported separately on form 8949 or schedule D. you would be subject to the wash sale rules

makeitreynesAuthor

Thanks Mike. I do realize now that the file is called 1099 Composite, and within the form it mentions
"OPTIONS SUBJECT TO SECTION 1256 REPORTING- Report on Form 6781 Gains and Losses from Section 1256 Contracts and Straddles."
So after checking what's under 1256 Options Activity, I'm realizing the 1099 Composite page is just a summarized relay of what's under the more detailed, 1256 options activity page.
The only options I did are 0DTE put/call credit spreads on cash settled options.
Under 1256 Activity I do get a more detailed view with the columns: options symbol, transaction type description (SALE, BUYCOVER), Quantity, Open Date, Close Date, Opening Amount, Closing Amount, Realized Gain Loss

I'm still figuring out which column do i get total proceeds from, and which column do i get cost basis from? I'm guessing total proceeds should be the closing amount, and cost basis should be the opening amount.

This is all I'm prompted for when filling out the 1099 section in turbo tax. However, I'm not sure I'm in the right turbo tax view for filling out this info