First of all, you wouldn't report this until you actually sell or close anything. The only exception is if you have to report these under the mark-to-market rules. These rules say you must treat open positions as if they were sold at fair market value at year-end. This ensures unrealized gains and losses are accounted for annually. if you are not sure whether this applies, chances are you aren't required to report this under marked to market rules.
If you are required, you will report this as 1256 contract. This would be reported in the Contracts and Straddles section in the investment income section of TurboTax.
- As you work through this section, the program will ask any elections. Here check the box that says straddle by straddle identification.
- The next screen gives a list of contracts and straddles, check Section 1256 contracts marked to market.
- The next section will give the choice to enter these as a total or individually.
- The next screen asks for the broker information and gains and losses. There is no EIN in this section. If TurboTax asks for one later, enter 99-0999999.
- Because of the Tax Cuts and Jobs Act in 2017, investment expenses are no longer deductible on a federal return but may be deductible on your state return. You can report this under:
- Go to Deductions and Credits
- Retirement and investments
- Other Investment Expenses
Once this is all said and done, a 6781 will be generated reporting your gains as a Marked-to-Market entry. When you enter this information, you can give Ox Bow Securities as a description.
As an FYI, if you enter this information like a stock and bond or security sale, remove it from this section on the return. Forex transactions aren't reported in this manner.
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