Hi guys, I typically trade options, but decided to trade futures when the VIX got too high. Unfortunately, I took a large loss. Will my futures loss be able to offset my options gains? I ask because I learned after the fact (stupid me) that futures are taxed 60/40. So, if for example I made 150,000 on options, but lost 100,000 on futures, can I just simply offset the two, or do I HAVE to follow the 60/40 rule? Thanks in advance!
I think options on exchange-traded futures are also 60/40. I am not sure though. Check the Green's trader tax presentation for additional info: http://mediasrv1.cbot.com/02062007_green
Thanks for the info. The futures trade I did was on the YM, but I typically trade stock options, so they are taxed at a normal rate.
What did you trade options on? If they were equity options then they are treated the same way as stocks and reported on Schedule D or D1, depending on your activity and number of trades. Your loss on the YM will be reported on form 6781, which flows through to Schedule D, then to your 1040. Your paperwork flow will go like this....6781 (futures) ---->>>> Schedule D/D1 (options, assuming they are equity) ---->>> 1040. Here is 2007's 6781 http://www.irs.gov/pub/irs-pdf/f6781.pdf
I mostly played options on equities like potash. I made quite a large sum of money this year, and then lost a large portion of it in futures. I think I'm really, really screwed here by having gains taxed at a normal rate, but futures losses at a much lower tax rate, does not offset nicely.