Futures , Taxes, and Mark to Market

Discussion in 'Index Futures' started by stock777, Aug 10, 2002.

  1. Dug this thread up as I'm doing research on electing MtM or not.

    As I understand it, I don't think anyone answered this correctly (let me know if I'm way off).

    You elect MtM on stocks. You have a 20k gain which is converted to ordinary gain.

    You don't elect MtM on futures. As a result, gains/losses on futures remain capital gains/losses. So if you lose 10k, you are capped at 3k to deduct against your ordinary loss.

    Your outcome is 20k-3k=17k. So you are taxed on 17k at your ordinary tax rate.
    #31     Mar 31, 2003
  2. Section 1256 contracts include nonequity options...

    Does that mean S&P index options are considered section 1256 contracts?
    #32     Mar 31, 2003