Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 3
posted Sep 11, 2024 4:43:00 PM

Can QQQ, SPY and DIA be treated as 1256 contracts?

If QQQ, SPY or DIA is day traded exclusively in a brokerage account can the ETF trading be treated as a 1256 contract? Would the the 60/40 rule apply and marked to market calculation of loss/gain?

0 1 5802
1 Replies
Level 15
Sep 11, 2024 5:00:11 PM

none of those etfs meet the definition of a 1256 contract. if they were your broker would be required to report them as such.

(b)Section 1256 contract defined
(1)In general
For purposes of this section, the term “section 1256 contract” means—
(A)any regulated futures contract,
(B)any foreign currency contract,
(C)any nonequity option,
(D)any dealer equity option, and
(E)any dealer securities futures contract.