Broker (Etrade/MS) is reporting incorrectly SPY options as 1256. What options do I have in Turbo Tax to correct my 1099-B
Hello,
My broker is reporting my unsold SPY options under 1256 under mark-to-market rules. This is what I see in my online portal and what I expect to receive in my 1099-B.
Everything I read online suggests that the IRS deems SPY contracts as NOT eligible for 1256 treatment. (Despite holding for less than 1 year, your tax liability will not be 100% short term but 60% long term/40% short term)
This also means that despite the fact that I have not sold any of these options, they are reported to the IRS under mark-to-market rules. (Assumed sold on Dec31st with tax treatment as above)
The article below highlights that SPY is treated as a security and not eligible for 1256 tax treatment.
My broker has indicated that they will not be issuing any corrected 1099-Bs and that this is their new policy for basis.
Can anybody help me figure out what are my options here?
1) Do I go with the 1099-B as provided by my broker despite that the fact that I feel like it is wrong?
2) Do I file my returns and enter the correct details here according to me (which normally would be unrealized gain since I have not sold any yet). How would I go about doing this in TurboTax or do I need a human Tax preparer for this?
Thanks!
