How Does the Lack of Physical Delivery Affect a Trader's Tax Obligations? ▴ Learn

How Does the Lack of Physical Delivery Affect a Trader’s Tax Obligations?

In many jurisdictions, cash-settled futures are treated differently for tax purposes than physically-settled ones or spot trades. They may be categorized as Section 1256 contracts, which often benefit from a 60/40 long-term/short-term capital gains split, regardless of the holding period.

This is simpler than tracking the cost basis of physically delivered crypto.

Name a Major Crypto Options Exchange That Offers Both Settlement Types

Explain the Difference between Physically-Settled and Cash-Settled Futures Contracts

What Is the Primary Difference between Cash-Settled and Physically-Settled Crypto Futures?

How Does a Clearing House Handle Settlement for Physically-Delivered Vs. Cash-Settled Futures?