SLV call option loss

[dubtaxes]

I have a call option loss on SLV of around -$200.  Fairly small and my only option trade.  Where in Turbotax would I record this?  I am seeing it listed under the Section 1256 Contracts - Regulated Futures and Nonequity Options.  The choices it gives me are in the straddles section and I am confused.  Where should I report this?  I have a choice between Mixed straddle election, straddle-by-straddle identification election, mixed straddle account election, and net section 1256 loss election?  Is it even a straddle?   I am totally confused and any help as to what form I should use would be great.  Thank you!

[GeorgeM777]

It is not a straddle if all you had was one call option contract.  To have a straddle you would need two offsetting options.   To keep this simple, you could just report this one option trade as follows:

1. Go to Income & Expenses,
2. Scroll down the page to Investment Income,
3. Select Stocks, Cryptocurrency, Mutual Funds, Bonds, etc.,
4. On the next page, select options when asked What type of investment did you sell?
5. Enter your information.

@dubtaxes

[dubtaxes]

HI @GeorgeM777 thank you for the response.  I am on the Mac Premier version and I do not see an Income & Expenses section.  Is there a similar section for the Mac version?  I do not see anything for Options. 

[GeorgeM777]

Yes, the Mac online version of TurboTax has the same display as the PC version.  When you log back into your account, you will likely be on the Home page. From the Home page select Income & Expenses, or if you see Pick up where you left off under Income & Expenses, you can select that too.  Once selected, the application will open and at the top the page, you should see the various main categories such as Income & Expenses,  Deductions & Credits, and Other Tax Situations.  

To get to the section where you can enter your option information, from Income & Expenses, scroll down to Investment Income and click on the drop-down arrow if necessary.  Select Stocks, Cryptocurrency...  After a few pages, you should see a page where you can enter your option information.  

@dubtaxes

[dubtaxes]

Sorry I couldn't find it @GeorgeM777 .  I have the installed version which is different than the online version, right?

Thank you again.

[DianeW777]

The option loss can be reported in TurboTax CD/Download with a little different action but similar.

1. Search (upper right) 1099b > Click the Jump to... Link > Add more sales (or start your entry)
2. Choose I'll type it myself' and Continue > Select your brokerage or bank > Continue > Enter one sale at a time
3. Enter Description 'Options' then complete the rest of the screen the sales price should be blank 
4. Select your Sale Category (long or short term)
5. See the image below

There are rules for the financial agents who hold investments and report transactions on redemption or sales of stock/bonds.

1. Covered means the agent knows and provides the cost basis
2. Noncovered means the agent does NOT know the cost basis  

[fanfare]

Even if you did do an options straddle you would not report it on Form 6781.

That form is for futures traders.

Report your options trades just like stocks.

The only difference is that options can expire and become worthless.

[SDun12]

The SLV calls do not belong on 6781 but "Even if you did do an options straddle you would not report it on Form 6781" is false. 

This form is used for 1256 contracts (futures) but also for any identified section 1092 straddles.  Not just straddles on futures.  A regular options "straddle" is covered under section 1092 and reported on this form.  

https://irc.bloombergtax.com/public/uscode/doc/irc/section_1092 

This is also addressed in Pub 590, Chapter 4

[fanfare]

If the IRS ever asks me why my broker-reported option spreads are on Form 8949,  not on Form 6781, then I'll worry about this.

I don't think that's going to happen.

[dubtaxes]

@fanfarethank you in advance for your thoughts.

SECTION 1256 CONTRACTS 2021 1099-B
8- Profit or (loss) realized in 2021 on closed contracts -223.33
9- Unrealized profit or (loss) on open contracts-12/31/2020 0.00
10- Unrealized profit or (loss) on open contracts-12/31/2021 0.00
11- Aggregate profit or (loss) on contracts -223.33

This is what it says for my SLV call option trade.   Isn't Section 1256 a straddle?  I do not know why it is showing up as a Section 1256 contract.  I am treating it like an option in my returns.  It is a minimal amount but I am a bit confused.

[fanfare]

"SECTION 1256 CONTRACTS 2021 1099-B"

@dubtaxes 

That's different.

This is a substitute 1099-B for Form 6781.

If your broker is reporting it this way then you use Form 6781.

only the amount from line 11 has to be entered.

don't check any of the Option Boxes.

don't put the transaction on Form 8949.

[dubtaxes]

@DianeW777 Would this be the proper way to disclose this if this were reported on my 1099-B just like this?

SECTION 1256 CONTRACTS 2021 1099-B* OMB No. 1545-0715
8- Profit or (loss) realized in 2021 on closed contracts -223.33
9- Unrealized profit or (loss) on open contracts-12/31/2020 0.00
10- Unrealized profit or (loss) on open contracts-12/31/2021 0.00
11- Aggregate profit or (loss) on contracts -223.33

[dubtaxes]

@fanfarewhen you do it this way TurboTax asks for a Schedule of Straddles and Components as well.  There is also something that asks for "If you have a net section 1256 contracts loss and checked Box D above, enter the amount of loss to be carried back.  Enter the loss as a positive number.  If you didn't check box D, enter -0-"

Would you know how to approach this?

[fanfare]

Yes I do.

As I said, don't check any of the Options.

" If you didn't check box D, enter -0-"