Hello, I would like a clarification about the following rule regarding Carryback of Losses from Section 1256.:
"The amount you can carry back to any prior year is limited to the smaller of:
A. 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
B. The gain, if any, reported on line 16 of Schedule D (Form 1040) for that carryback year."
For instance, suppose that I had a loss of $10K for A (in other words zero gain) and the overall gain for B was $20K. Then what is the smaller of A and B in this case? Is it zero? Or is it $20K, because in A it states "the gain, 'if any'."
I would appreciate your help. Thank you.
