Not true. Section 1256 are treated like capital gain/loss. You can only carry forward the $3K. (Trust me, I know). But you HAVE to file every year, to carry the loss forward, even if you owe no tax.
No sir. You can. Quick google yields: https://www.law.cornell.edu/uscode/text/26/1212 If you have this situation, and within 3 years, refile your taxes. Thankfully, my knowledge is only academic and I never had to. But I have always known it's a thing
Get a good accountant. If the 1/2 million is forgiven or discharged in Chapter 7 it get's very complicated. A lot may also depend on your other assets.
I would suggest that you contact the trader specialty accounting firm www.greentradertax.com And get real answers from real accountants who specialize only in Accounting for traders
I am the OP. Not a trader, just an investor. Lost a 7 figure amount in a day. Broker won a 500k judgment against me. I am now preparing to file bankruptcy, but in doing taxes for my trades, it seems odd to show $1.5 mil in losses when only $1 mil are mine and the other $500k were covered by the broker and will hopefully be discharged in my upcoming bankruptcy. ps. I would be curious to hear any stories of people who killed themselves after a big trade wipeout. I am surprised more people don't kill themselves who file for bankruptcy.
While it may be helpful to vent out on this board you need to get lawyers and accountants to guide you and give you real answers that are accurate—