Tax preference on options on futures?

Discussion in 'Index Futures' started by gnode, Nov 4, 2011.

  1. gnode


    I read an article that says options on index futures get the same tax preference as index futures, effectively capping gains at 23% tax rate.

    Is this still true? I have not found an article about it newer than 2008.

    I do quite a bit of options on RUT. If this tax preference is true, I am going to increase that component of my trading strategy.
  2. Options on futures are section 1256 60/40 treatment. Broad-based indexes are futures, so options on them are futures too.
  3. gnode


    I love you Robert.
  4. 60 or 40 taxed?
  5. A little more info.

    But if for one reason or another you choose trader status you loose 60/40 status - since all p/l will be treated as ordinary income.