Forex
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07-29-2008, 01:02 AM
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Currency futures & options on U.S. exchanges are IRC 1256 contracts with 60/40 tax rate benefits
Currency futures and options listed on U.S. commodities and
futures exchanges are by default treated as 1256 contracts. •They are reported on Form 6781, where they are split 60/40 before being moved over to Schedule D (Capital Gain or Losses). •Capital loss limitations of $3,000 per year apply. Currency futures and options listed on foreign (not U.S.) exchanges are treated differently by default, but possibly in the same manner after doing some leg work. OTC forex options are IRC 1256 contracts, but if you want 60/40 treatment, you still have to elect it.      
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| forex, irc 1256 contracts, taxation, tips |
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