Are regulated futures contracts taxable?
James Craig
Published Mar 31, 2026
Individual tax filers must report gains and losses for contracts according to mark-to-market rules. For example, assume a trader bought a regulated futures contract on May 5, 2019, for $25,000. The trader reports this on Form 6781 (treated as 60% long-term and 40% short-term capital gain).
How do I report regulated futures contracts?
Regulated futures contracts that are taxed under the mark-to-market rules of IRC § 1256 are reported on Part I of Form 6781 . A net gain or loss from this Part is then reported on the applicable Schedule D . Gains and losses from straddle positions that are taxed under IRC § 1092 are reported in Part II.
Where do I enter regulated futures contracts?
Follow these steps to enter Form 1099-B regulated futures contracts:
- Go to the Input Return tab.
- From the left of the screen, select Income and choose Dispositions (Sch D, etc.).
- Choose Sch D/4797/etc.
- Click the Details button in the Quick Entry grid to expand.
- Under the Dispositions (Schedule D, 4797, etc.)
How are puts and calls taxed?
In the case of call or put writes, all options that expire unexercised are considered short-term gains. If they subsequently sell back the option when Company XYZ drops to $40 in September 2020, they would be taxed on short-term capital gains (May to September) or $10 minus the put’s premium and associated commissions.
Where do I put Section 1256 contracts on my taxes?
Include on line 1 all capital gains and losses from section 1256 contracts open at the end of your tax year or closed out during the year. If you received a Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or substitute statement, include on line 1 the amount from box 11 of each form.
How much money can you make on covered calls?
In general, you can earn anywhere between 1 and 5% (or more) selling covered calls. How much you earn depends on how volatile the stock market currently is, the strike price, and the expiration date. In general, the more volatile the markets are, the higher the monthly income you’ll earn from selling covered calls.
