Are gains/losses on Section 1256 regulated futures contracts reported only using the aggregate (gains - losses)? Or are only total the gains (losses excluded) taxed?

For example, say a really good futures trader hit it big and made $1,000,000 in profit one year just trading S&P 500 contracts on symbols like the MES or ES. Their total winning trades amount to $2,000,000 and their total losing trades amount to -$1,000,000 leaving them with the $1,000,000 (yearly PNL) profit in aggregate gains mentioned in the first sentence. In this scenario would this trader, come tax season, report and pay taxes on only... A) the aggregate gain of the $1,000,000 (Yearly PNL) profit. or B) the total winning trades amount of $2,000,000.

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1 Best answer

Employee Tax Expert

Apr 16, 2025 2:06:06 PM

The trader would report aggregated gain/loss. Option A in your example.

Employee Tax Expert

Apr 16, 2025 2:06:06 PM

The trader would report aggregated gain/loss. Option A in your example.

Level 15

Apr 18, 2025 8:37:03 PM

The profit/loss on one SP mini contract is $50 per point. You do the math.

Thanks to Mr Trump the SP can be moving over one hundred points several times a day, sometimes in just 30 minutes.

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Are gains/losses on Section 1256 regulated futures contracts reported only using the aggregate (gains - losses)? Or are only total the gains (losses excluded) taxed?