Futures contract taxation

Forum|Forum|5 years ago
March 21, 2021
2 replies
32 views

I purchased a S&P 500 Futures contract in 2020 which I sold in Mar 2021. For 2020 taxes, do I need to pay taxes on the unrealized gains till Dec 2020? I got a Substitute 1099 form" from E-trade.

Not A Product Question

Best answer by Mike9241

yes. an S&P futures contract comes under the definition of 1256 contract. for 1256 contracts at the end of the year gain or loss must be figured and reported by computing its market value and comparing to its cost

the net is reported under the contracts and straddles section of Turbotax. it shows up on form 6781. 60% of any gain or loss is treated as long-term and 40% as short-term.

for some more info

https://www.tradelogsoftware.com/resources/filing-taxes/futures

Mike9241

Answer

Level 15

the net is reported under the contracts and straddles section of Turbotax. it shows up on form 6781. 60% of any gain or loss is treated as long-term and 40% as short-term.

for some more info

https://www.tradelogsoftware.com/resources/filing-taxes/futures

Mike9241

Anonymous

Thanks @Mike9241 ! TurboTax populated the Part I "Section 1256 Contracts Marked to Market" but left the Part III section empty although all of my gain was unrealized. Actually I think it didn't even ask whether the gain is realized or unrealized. Should I manually fill Part III or it doesn't matter since it says "memo entry only"? Screenshots below.