Section 1256 loss carryback amendment

Question

I had significant unrealized Section 1256 gains from 2021 and I filed for an extension to file in 2022. So I paid taxes when filing for extension in April 2022, and then also again while filing the final taxes in Oct 2022. But in December 2002 I got letters from both IRS and the state for additional taxes owed and I paid those as well.

But those Section 1256 unrealized gains were actually losses in 2022, so I now can carryback those losses and amend my 2021 taxes.

1. I used Turbotax desktop for 2021 filing and trying to figure out the amendment process. While amending, where do I enter those additional taxes paid in December after the IRS and state letters received for additional taxes?

2. While electing Net section 1256 contracts loss election in 2022, how to enter these amounts on 2021 amendments and now 2022 filing?

Amounts from broker statement 2021

SECTION 1256 CONTRACTS 2021 1099-B* OMB No. 1545-0715
8- Profit or (loss) realized in 2021 on closed contracts 7,275.24
9- Unrealized profit or (loss) on open contracts-12/31/2020 -861.13
10- Unrealized profit or (loss) on open contracts-12/31/2021 165,170.97
11- Aggregate profit or (loss) on contracts 173,307.34

Amounts from broker statement 2022

SECTION 1256 CONTRACTS 2022 1099-B* OMB No. 1545-0715
8- Profit or (loss) realized in 2022 on closed contracts 8,674.96
9- Unrealized profit or (loss) on open contracts-12/31/2021 165,170.97
10- Unrealized profit or (loss) on open contracts-12/31/2022 0.00
11- Aggregate profit or (loss) on contracts -156,496.01

Mike9241 · Answer

you check the carryback election on the 2022 form 6781. then specify the amount of the loss to be carried back it first must be carried to 2019 and then any net capital loss is carried forward to 2020 and so on

from 6781 instructions

Box D. Net Section 1256 Contracts Loss Election
If you have a net section 1256 contracts loss for 2022, you can elect to carry it back 3 years. Your net section 1256 contracts loss is the smaller of:
• The excess of your losses from section 1256 contracts over the total of (a) your gains from section 1256 contracts plus (b) $3,000 ($1,500 if married filing separately), or
• The total you would figure as your short-term and long-term capital loss carryovers to 2023 if line 6 of Form 6781 were zero. Use a separate Schedule D (Form 1040) and Capital Loss Carryover Worksheet (in Pub. 550) to figure this amount.
The amount you can carry back to any prior year is limited to the smaller of:
• The gain, if any, that you would report on line 16 of Schedule D (Form 1040) for that carryback year if only gains and losses from section 1256 contracts were taken into account; or
• The gain, if any, reported on line 16 of Schedule D (Form 1040) for that carryback year.
The amounts just described are figured prior to any carryback from the loss year. Also, the carryback is allowed only to the extent it doesn’t increase or produce a net operating loss for the carryback year. The loss is carried to the earliest year first.
Make the election by checking box D and entering the amount to be carried back on line 6. To carry your loss back, file Form 1045, Application for Tentative Refund, or an amended return. Attach an amended Form 6781 and an amended Schedule D (Form 1040) for the applicable years.
On the amended Forms 6781 for the years to which the loss is carried back, report the carryback on line 1 of that year’s amended Form 6781. Enter “Net section 1256 contracts loss carried back from” and the tax year in column (a), and enter the amount of the loss carried back in column (b).