Just want to make sure that this is the proper way to report a section 1256 transaction that was used to take a loan using a box spread (https://thefinancebuff.com/short-box-spread-vs-margin-loan-fidelity.html)
Let us assume Box 11 on form 1099B has a negative amount (say -100).
In Turbotax, for form 6781,
I would select none of these for a box spread:
1. Mixed Straddle election
2. Straddle by Straddle identification election
3. Mixed Straddle account election
4. Net Section 1256 Contracts Loss election
On the next screen with the following options:
1. Section 1256 contracts marked to market
2. Losses from straddles (Assuming I enter 2nd and 3rd trades here?)
3. Gains from straddles (assuming I enter 1st and 4th trades here?)
4. Unrecognized gains from positions held on Dec 31,2022
5. None of The above
Lastly enter the selected account owned by, the broker name, and entered total losses (-100)?
I choose none of the above for the last section?
hedging transaction
foreign currency (treat as ordinary income or loss)
foreign currency (treat as capital gain or loss)
None of the above
When I do this, only part I of form 6781 is populated. In Part I,
Aa: Name of broker
Ab: Description
Ac:-100
Ad: <Nothing fills here>
Ae: T
Af: <Nothing fills here>
Line 1,2,3,5, and 7: -100
Line 8:40
Line 9: 60
Rest of the form is empty. Is this the right way to report the transaction?
These losses carry over to my capital loss worksheet.
Thank you.
