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Forex currency loss . the currency loss / gain is reported in the form 6781.Please let me which part should be updated : part 1 , 2 or 3

 
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2 Replies
DavidS127
Expert Alumni

Forex currency loss . the currency loss / gain is reported in the form 6781.Please let me which part should be updated : part 1 , 2 or 3

It depends on the nature of the transaction(s).  According to the instructions for Form 6781, loss from a section 1256 contract (including a foreign currency contract) are reported in Part I.  If the loss is from a straddle, it is reported in Part II. 

 

When you have a loss, Part III applies to each position you held at the end of the tax year "if the FMV of the position at such time exceeds your cost or other basis as adjusted".

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Forex currency loss . the currency loss / gain is reported in the form 6781.Please let me which part should be updated : part 1 , 2 or 3

report your gain or loss in Part I as follows

"1099-B XYZ Brokerage"

 

Unless you are a professional and are hedging, Part II does not apply to investors.

 

Part III is optional.

 

Don't check any of the boxes on the form.

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