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Level 1
posted Oct 25, 2023 9:18:48 AM

tax payments trading binary options on the NADEX.

What is the tax consequences for Mark to Market trading on the NADEX  trading 5 minute binary options? No over nights.

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1 Replies
Employee Tax Expert
Oct 25, 2023 10:47:20 AM

Hi @htrumbo2,

 

Mark to Market trading is generally associated with 

Section 1256 Contracts and Straddles from a tax perspective, covering futures and options trading. All open trades in this category, as of the end of the year (December 31), are reported as being sold at fair market value, even if you continue to hold the investment. For tax purposes, every Section 1256 gain or loss is treated as 60% long term and 40% short term, no matter how long it is owned.

 

This article provides further detail on this topic: https://turbotax.intuit.com/tax-tips/investments-and-taxes/what-is-form-6781-gains-and-losses-from-section-1256-contracts-and-straddles/L2rfcJXT9