6781 not transferring correctly
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purple_rain
New Member

6781 not transferring correctly

I am trying to file an amended return now by adding an offsetting gain on a straddle position. (I learned after filing 2019 that I didn't enter all required forms for stock options.) It shows up correctly in my income summary list on the website. However, it is not transferred correctly to Schedule D to offset the reported loss (and offset the carryover loss).

 

This is a simple "rolling covered call" - the stock increased in value, I still hold the stock, I bought back a short option at a loss and sold another short option. I did not choose any of the complex straddle election boxes as I believe they don't apply. The increased stock value means that I can't claim a loss on the position for the year.

 

I tried calling support, but the agents were not able to understand the problem. Is there any way to report this issue to TurboTax more directly?

5 Replies
tagteam
Level 15

6781 not transferring correctly

If this has not been resolved, you should contact Support, via the link below, for this issue.

 

What is the TurboTax phone number? (intuit.com)

purple_rain
New Member

6781 not transferring correctly

Thank you. I tried this, and the agent could not understand the problem. I am not sure how to communicate “value not being transferred from 6781 to schedule D” in a clearer way...

Anonymous
Not applicable

6781 not transferring correctly

your situation does not seem to me to be a section 1256 contract unless you left off some info like being a dealer

Use Form 6781 to report:
• Any capital gain or loss on section
1256 contracts under the mark-to-market rules, and
• Gains and losses under section 1092
from straddle positions.
For details on section 1256 contracts
and straddles, see Pub. 550, Investment
Income and Expenses.
Section 1256 Contract
A section 1256 contract is any:
• Regulated futures contract,
• Foreign currency contract,
• Nonequity option,
Dealer equity option, or
• Dealer securities futures contract

 

Straddle
A straddle means offsetting positions
with respect to personal property of a
type that is actively traded.
Offsetting Positions
If there is a substantial decrease in risk
of loss to a taxpayer holding a position
because that taxpayer or a related party
also holds one or more other positions,
then those positions are offsetting and
may be part of a straddle. However, if an
identified straddle is properly
established, other positions held by the
taxpayer won’t be treated as offsetting
with respect to any position that is part
of the identified straddle.
General Rule for Straddles
If you don’t make any of the elections
described in box A, B, or C, and you
have a loss on the section 1256 contract
component, use Part II to reduce the
loss by any unrecognized gain on the
non-section 1256 contract component
before making an entry in Part I. You
also must reduce the loss from any
section 1256 contract component of a
straddle that would be a mixed straddle
if the positions had been properly
identified as such.

 

has the broker reported it as a 1256 gain/loss. 

purple_rain
New Member

6781 not transferring correctly

Thanks for your continued interest.

 

This is not a 1256 contract, but rather the 2nd bullet "Gains and losses under section 1092 from straddle positions". https://www.law.cornell.edu/uscode/text/26/1092

 

I am expecting the stock gains to be an "offsetting position" for the option losses.

tagteam
Level 15

6781 not transferring correctly


@purple_rain wrote:

I am expecting the stock gains to be an "offsetting position" for the option losses.


TurboTax might not (and probably does not) support that scenario, particularly the online versions.

 

 

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