Don't know if this is the right forum, but here goes: The Feds treat futures, forex, and other contracts defined in IRC Â§ 1256, as 60% long term capital gains and 40% short term gains, irrespective of how long the contract is held. If one is successful enough to be in the highest tax bracket, that translates to 23% overall. Not bad, compared to the 35% one is normally charged for the short term capital gains made in equities trading. What I can't figure out is how to calculate income tax owed to the state on 60/40 contracts. It obviously differs from state to state, but how is the figure calculated? I live in California where we pay 9.3% (for nothing, of course). So how much does Arnold want over and above the 23% Uncle Sam already claims?