Option 1256 Contracts

Forum|Forum|3 years ago
February 20, 2023
2 replies
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Last year was the first year I did a did a few OPTIONS trading. I got to the point in the Turbo Tax Interview where is asks if I have any 1256 Options Contracts ---- How would I know ?

Do brokers send you a Tax form (Like 1099) that identifies if you had 1256 Contracts ?

MinhT1

Options are section 1256 investments. If you traded options in 2022, you should answer YEs to this question.

Futures contracts are Section 1256 contracts for the IRS.

Please read this TurboTax article on how to report income on Section 1256 contracts.

You'll need to complete form 6781.

To do this in TurboTax, please follow these steps:

Click on Search on the top right of your screen
In the search box, type form 6781
In the search result page, click on Jump to form 6781
TurboTax will take you through a questionnaire where you can enter your information
TurboTax will then automatically split your gains between long-term and short-term to report them on your tax return.

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Mike9241

stock options are not 1256 contracts.

read the definition on the form 6781 instructions page 2 of the form

https://www.irs.gov/pub/irs-pdf/f6781.pdf