I have Section 1256 realized gains only. How do I input them in Turbotax?

[ghy56]

First year I have Section 1256 gains, specifically a profit on closed contracts, and nothing from prior years. I'm confused on how to enter them. Originally I imported information from my broker into Turbotax, but it seems this section was not included in the import. Here's what I'm doing:

1 - Select Contracts & Straddles (I have no straddles)

2 -  Any Elections? (Since I have no straddles or losses, I leave all boxes unchecked)

3 - Contracts and Straddles - I have no open contracts, only profits on closed contracts. If I select nothing on this screen, it takes me out and back to Personal Income. It seems like I have to select "Section 1256 contracts marked to market". However these contracts were closed during the tax year, so is the "marked to market" section correct?

4 - If I select the "marked to market" option, I then have to enter the Broker, Account Description, Total Profits, and Total Losses. So I'm assuming I leave the "Total Losses" box blank as my gains outweighed my losses, and it's not asking for total profits less total losses?

4 continued - there is a special handling section, where "hedging transaction" is an option. Some of the contracts were speculative, some were to hedge against losses in long stock positions I hold. Do I need to select "hedging transaction"?

[Mike9241]

you must select 1256 contracts marked to market. this includes any 1256 contracts closed out during the year. if you have open 1256 contracts at year-end they are deemed sold at FMV on 12/31  (that's where the M-T-M comes from). of course if you have no open contracts at year-end think as you in effect have marked to market just that the amount is $0

you may want to read the instructions for form 6781 (below the form)  because that's where 1256 contract reporting is done. and despite the true holding period 60% are treated as long term and 40% are treated as short-term.

https://www.irs.gov/pub/irs-pdf/f6781.pdf  

[ghy56]

Thank you! I've gone through the instructions for form 6781 a few times, I think it's going to take a few more times before it sinks in. Hopefully turbotax will clarify this more in the coming years in the entry screen.

Is it possible to bypass the easy entry screens and go straight to tax form entry?