IRS Section 1256 60/40 futures & index options tax calculator

Regulated US futures contracts (CME, CBOT, NYMEX, COMEX—including ES, MES, NQ, MNQ, YM, RTY, GC, MGC, CL, and CME Bitcoin/Ether futures) and broad-based non-equity index options (SPX, XSP Mini-SPX, NDX, RUT, VIX, DJX) generally qualify as Section 1256 contracts reported on IRS Form 6781. Stock options and ETF options (SPY, QQQ, IWM) are equity options and never qualify; they get ordinary short- or long-term capital gain treatment based on how long you held them.

No holding period is needed: the 60/40 split applies however long you held the contract, even a 10-second futures or 0DTE scalp (IRS Publication 550). Open contracts are treated as sold at fair market value on the last business day of the tax year (IRC §1256(a)(1)), and IRC §1256(f)(5) says the §1091 wash-sale rule does not apply to losses recognized under that rule. The straddle rules (IRC §1092) can still defer a loss when you hold offsetting positions.

A net Section 1256 loss is a capital loss, split 60% long-term and 40% short-term on Form 6781. It first offsets your other capital gains; beyond that you can deduct the lesser of $3,000 ($1,500 if married filing separately) or your net capital loss against other income each year, and carry the rest forward (IRS Topic 409). Individuals can instead elect to carry a net Section 1256 loss back three years, against Section 1256 gains only.

Yes, by election. If you have a net Section 1256 contracts loss, tick box D on Form 6781 to carry it back three years, earliest year first. In each year it can offset only that year's net Section 1256 contracts gain and cannot create or increase a net operating loss, and the carried-back loss is again treated as 60% long-term and 40% short-term (IRC §1212(c), IRS Publication 550). You claim it on Form 1040-X or Form 1045; corporations, estates and trusts cannot make the election.

Your broker reports regulated futures and other Section 1256 contracts as aggregate profit or loss on Form 1099-B. Enter it in Part I of Form 6781 (Gains and Losses From Section 1256 Contracts and Straddles): line 8 takes 40% as short-term capital gain or loss to Schedule D line 4, and line 9 takes 60% as long-term to Schedule D line 11. Elections such as the net Section 1256 loss carryback are made with the boxes at the top of Form 6781.

No. The $25,000 figure came from FINRA's pattern day trader rule in FINRA Rule 4210, a securities margin rule for stock and options margin accounts; it never applied to futures, which are regulated by the CFTC and held at futures brokers. FINRA has since replaced those day-trading requirements: the SEC approved the Rule 4210 amendments on 14 April 2026, effective 4 June 2026, with firms allowed to phase them in until 20 October 2027 (FINRA Regulatory Notice 26-10). For futures, your broker's account minimum and margins are what count.

Generally no. Unless you are trading your own personal live brokerage account in your own name, payouts from simulated funded prop firm accounts are paid to you as an independent contractor (reported on Form 1099-NEC in the US) and taxed as ordinary business/self-employment income rather than Section 1256 capital gains. Always consult a qualified CPA.