If I lost 10K in short-term stock trading and made 10k in Sec. 1256 contracts, would I report a 10K loss (capped at $3,000 and $7,000 carried over to next year) AND a 10K gain (taxed at the 1256 blended rate OR would I simply be flat for the year, 0 gain or loss?
losses (from stocks) 3000 gain from futures) 4000 (short term) + 6000 (long term) net 1000 short term + 6000 (long term)... I'm a CPA from the school of hard knocks
if that's all you have, it would net out to zero. You can apply long term gains against short term losses in the current year.
That would probably depend on if you were buying and selling the same (or substantially identical) stocks within 30 days of each other, at which point you'd be subject to wash sale rules, and you'd have to calculate your net cost basis through all those trades. And even then, could the stock sales be considered ordinary losses as opposed to capital? In the end you really need an accountant for it all.
The surest way to not get in trouble with the tax man is forget the loss and just report the gain the bigger the better.