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New Member

What is the tax rate on gain by day trading stocks and futures?

Hello! I used TurboTax last year and I am extremely satisfied. Even though my taxed this year are a little different, I'm looking for guidance about current products since I would like to use the services once again. I will get a W2 from my current employer... This year I've been trading futures, and I havea small gain (less than $10,000) how much tax (%rate) will I have to pay? Hope to hear from you guys soon.  Sincerely, Jason
4 Replies
Level 8
Level 8

What is the tax rate on gain by day trading stocks and futures?

Futures contracts are among the 1256 Contracts and Straddles. Gains and losses are taxed under the "60/40" rule. The rate that you'll pay on the your gains from trading futures will depend on your income, with 60% of the gain treated as a long term capital gain at a rate of 0% if you fall into the 10-15% tax bracket, 15% if you fall into the 25-35% bracket, and 20% if you fall into the 36.9% bracket. The 40% of the gains considered to be short term will be taxed at your ordinary income tax rate.

This year you will need to use the TurboTax Premier edition to report capital gains and losses. It also includes form 6781 that you need to report transactions in 1256 contracts and straddles. 

A section 1256 contract that you hold at the end of the tax year will generally be treated as sold at its fair market value on the last business day of the tax year, and you must recognize any gain or loss that results. That gain or loss is taken into account in figuring your gain or loss when you later dispose of the contract. The gain or loss is taxed under the 60/40 rule. Under the marked-to-market system, 60% of your capital gain or loss will be treated as a long-term capital gain or loss, and 40% will be treated as a short-term capital gain or loss. This is true regardless of how long you actually held the property.

Use Part I of Form 6781 to report your gains and losses from all section 1256 contracts that are open at the end of the year or that were closed out during the year. This includes the amount shown in box 10 of Form 1099-B. Then enter the net amount of these gains and losses on Schedule D (Form 1040), line 4 or line 11, as appropriate. include a copy of Form 6781 with your income tax return. 

Please see the following for additional information:

Answers are correct to the best of my ability but do not constitute legal or tax advice.
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New Member

What is the tax rate on gain by day trading stocks and futures?

How do wash sales work for futures? I have been trading mostly options for several years but hesitant to short term trade futures do the wash sales I have received in the past for stock assignments. 

Level 15

What is the tax rate on gain by day trading stocks and futures?

Futures are mark-to-market each day. There's no wash sale rule for futures.

Start small, stay small, and know what you're doing, or you'll be wiped out.

New Member

What is the tax rate on gain by day trading stocks and futures?

Thanks for the info. I appreciate it. 

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