tax payments trading binary options on the NADEX.

Forum|Forum|2 years ago
October 25, 2023
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What is the tax consequences for Mark to Market trading on the NADEX trading 5 minute binary options? No over nights.

Ask the Experts - Extension - Sept 2023

Andrew_W

Employee Tax Expert

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

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