Do Section 1256 Rules Apply to Crypto Options on Regulated Exchanges?
Yes, Section 1256 rules apply to crypto options if they qualify as "non-equity options" and are traded on a regulated exchange. For example, options on regulated Bitcoin futures contracts (which are non-equity) traded on a CFTC-regulated exchange would qualify.
They would be subject to the mark-to-market rule and the 60/40 tax treatment.
