I have a partnership Schedule K-1 that reported the following lines (under code 11ZZ) and indicated that the first two are to be reported on Form 6781.
Annual Mixed Straddle Account Gain treated as Short-term: X
Annual Mixed Straddle Account Gain treated as Long-term: Y
Annual Mixed Straddle Account Gain treated as Ordinary: Z
I had the following questions:
1. My understanding is that at most 50% of combined gains from all mixed straddle accounts can be treated as long-term (based on https://www.law.cornell.edu/cfr/text/26/1.1092(b)-4T). However, while calculating this, should I include the gains treated as ordinary in the denominator? In particular, should the long-term gains be capped at 0.5*(X+Y) or 0.5*(X+Y+Z) here.
2. Since I do not have the full details of the trades, should I simply indicate that these are from a Schedule K-1 in the attached statement? Do I need to include any other details?
3. Do I need to check the box for the mixed straddle account election in my Form 6781? I assume that the partnership has already made the election.
