I don't know what IAB is doing here's the definition of 1256 contracts
(b)Section 1256 contract defined
(1)In general
For purposes of this section, the term “section 1256 contract” means—
(A)any regulated futures contract,
(B)any foreign currency contract,
(C)any nonequity option,
(D)any dealer equity option, and
(E)any dealer securities futures contract.
(g)Definitions
For purposes of this section—
(1)Regulated futures contracts defined
The term “regulated futures contract” means a contract—
(A)with respect to which the amount required to be deposited and the amount which may be withdrawn depends on a system of marking to market, and
(B)which is traded on or subject to the rules of a qualified board or exchange.
i have never heard of section 1256 applying to options on PTP since they are equity securities. But then there is always that possibility. best to contact IAB for an explanation
1256 gain/losses are reported on form 6781 and then carried to the applicable section of schedule D.
