How Is a Net Loss under the 60/40 Rule Carried Forward?
A net loss from Section 1256 contracts is first carried back three years to offset any Section 1256 gains in those years. Any remaining loss is then carried forward indefinitely.
The loss maintains its 60/40 character when carried back or forward, meaning it can only offset future Section 1256 gains or is subject to the standard capital loss deduction limits.
