Carryforward Losses trading options on futures

[user53165]

Hi,

I did my taxes with a CPA not TT for 2017. Now it's time to file 2018 tax and I have question about losses from trading Options on Futures: can I carry forward losses from 2017. My accountant says I can't. I wonder why? They filled my tax return using Form 6781: Gains and Losses From Section 1256 Contracts and Straddles. I am not an accountant, but trying to understand how to properly enter information in 2018. Can  you please advise? I want to amend my tax return.

thank you in advance for your help!

[tagteam]

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@user53165 wrote:

My accountant says I can't. I wonder why? They filled my tax return using Form 6781...

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Did you accountant mention why you cannot carry over the losses? Perhaps you can get some clarification.

Typically, the losses are split, 60% long-term capital gain/loss and 40% short-term capital gain/loss unless, of course, if you are a dealer.

There is a section in TurboTax for Capital Loss Carryovers under Investment Income for this purpose.

[user53165]

I am not a dealer, I am a software developer and traded options on futures as my side gig. That's why I am curious too. They don't clarify at all. Just saying: you cannot carry forward losses on those trades. But I am curious what is the difference? Losses are losses. 

[tagteam · Accepted solution]

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@user53165 wrote:

They don't clarify at all. Just saying: you cannot carry forward losses on those trades. But I am curious what is the difference? Losses are losses. 

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That is why I asked if you could get some clarification from them; they absolutely should be able to cite a rationale as to why you cannot carry forward the losses.

Otherwise, losses and gains are  typically netted (capital gains with capital losses, ordinary losses with ordinary gains) and the balance carried forward. Certain losses may give rise to an NOL (net operating loss) which must be calculated, but an NOL can still be carried forward to future tax years.

[user53165]

thank you

[Meli_2]

Yes, you can carry over these losses. You must have TT Premier or Home business to handle these transactions. You can import the 1099 from your brokerage firm electronically and TT will do all the work. Double check the electronic transfer though because although TT handled my 1256 contracts accurately, it placed some of my tax exempt muni bond interest in the taxable category so I always type in the summary information manually and compare it to the electronic download for my brokerage 1099-B, 1099-INT, and 1099-DIV. Typing in the summary information is very easy, the electronic download really just saves time for your individual stock trades if you have a large number.

[Anonymous]

is box D on form 6781 checked?         that's an election to carryback some or all of these losses to the 3rd prior year.    the amount to be carried back is on line 6

any other boxes check? 

there may be another  reason - if you had other capital gains that offset the losses on the 6781, then there are no losses to carry forward.  look at schedule d for 2017 line 16  if it's positive no loss carry forward.  

other than these, ask your accountant to explain.  you paid him i assume so he owes you an explanation

[user53165]

Thank you. I would ask. Can you suggest someone to amend my taxes professionally? 

[tagteam]

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@user53165 wrote:

Thank you. I would ask. Can you suggest someone to amend my taxes professionally? 

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You can try TurboTax Live Assist & Review or TurboTax Live Full Service (link below).

https://turbotax.intuit.com/personal-taxes/online/