the Section 1256 losses should be on line 10C of the k-1. The loss then flows to Form 6781 in your 1040. There you can make the carryback election. You must follow the rules that may limit the carryback. Even if not carried back these are capital losses that can offset future years' capital gains. If there are none, as long as you have positive adjusted gross income, you can deduct capital losses against it. up to $3,000 per year.
from instruction when box D c/b election is checked
Box D. Net Section 1256 Contracts Loss Election
If you have a net section 1256 contracts loss for 2024, 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 2025 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.
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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.
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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).
