Is the 60/40 Rule Mandatory for All Section 1256 Contracts? ⎊ Path

Is the 60/40 Rule Mandatory for All Section 1256 Contracts?

Yes, the 60/40 rule is mandatory for all gains and losses realized from Section 1256 contracts, including those marked-to-market at year-end. A taxpayer cannot elect out of this treatment for these specific instruments.

The only exception is if the contract is part of an identified mixed straddle where an election is made to apply a different tax treatment.

How Does the Wash Sale Rule Differ for Stocks versus Section 1256 Contracts?

What Is the Mark-to-Market Rule for Section 1256 Contracts?

What Is the Main Advantage of Electing the Mixed Straddle Account?

How Does the Mark-to-Market Rule Interact with the Wash Sale Rule?

Does the Holding Period Matter for Options on Section 1256 Contracts?

Is There a Similar Rule to the Wash Sale for Section 1256 Contracts?

What Is the Significance of Section 1256 Contracts in Financial Derivatives Tax?

Do Foreign Currency Contracts Qualify as Section 1256 Contracts?

Glossar

Section 1256

Standardization ⎊ This specific tax code provision mandates special treatment for certain regulated futures contracts, which can apply to crypto derivatives traded on designated exchanges under specific conditions.

Section 1256 Contract

Definition ⎊ This classification identifies specific exchange-traded futures and certain non-equity options that are subject to special tax accounting rules under the relevant tax code section.