Tax Forms-Schedule D?

Discussion in 'Options' started by miyo, Mar 29, 2011.

  1. Index options are reported on a different form. I don't recall the number, or whether you also need to put them on Sched D. Google is your friend.

    You should report your losses so you can carry them over to following years.

    One year I actually made $30 on a VIX spread but I didn't file the form. It would have cost me over $100 for my tax guy to file it.
     
    #11     Mar 30, 2011
  2. The trades that get multiple term treatment (60/40) are reported on Form 6781.

    http://www.irs.gov/pub/irs-pdf/f6781.pdf

    You don't need to itemize all the trades. Just report the aggregate gain/loss on that form, one line per broker, and follow instructions.

    There are several tax advantages to trading futures and the broad-based, non-equity (index) options. The first is the 60/40 treatment itself. You keep more (less tax) if you are profitable. Also, the tax reporting is so much simpler. You can make 10 thousand trades in a year and just report one aggregate number to the IRS -- how much you gained or how much you lost on the above form.

    RUT and SPX option trades get this 60/40 treatment. Don't report the trades on Sched D. Just report the aggregate gain/loss on 6781 as I mentioned.

    I am not a tax professional, so consult one, of course.
     
    #12     Mar 30, 2011
  3. Anyone know if the IRS ever made a decision on how to treat index ETFs like SPY and IWM?
     
    #13     Mar 30, 2011
  4. Thanks! Much appreciated guys.
     
    #14     Mar 30, 2011
  5. To my understanding (not a tax prof), they are NOT 1256 cars. The thieves (IRS) have not definitively stated one way or the other. If you claimed they were on your tax return and got audited I'm sure there's a good case to be made that they are 1256 cars according to the textbook def. Just not sure you want to be the test case.:D
     
    #15     Mar 31, 2011