tax rate on credit spread trades

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The tax rate on Section 1256 contracts is

• 60% is taxed as long-term capital gains
• 40% is taxed as short-term capital gains

For non-Section 1256 contracts the tax rate is determined by the length of the holding period.

IRS Publication 550 goes into detail of what is considered a Section 1256 contract.  Please note that the Market to Market rules are different and Section 1256 contracts will be reported on a Form 6781