Form 6781 Gains and Losses From Section 1256

Contracts and Straddles

OMB No. 1545-0644

2019
Department of the Treasury ▶ Go to www.irs.gov/Form6781 for the latest information. Attachment
Internal Revenue Service ▶ Attach to your tax return. Sequence No. 82
Name(s) shown on tax return Identifying number

Check all applicable boxes (see instructions). A Mixed straddle election C Mixed straddle account election
B Straddle-by-straddle identification election D Net section 1256 contracts loss election
Part I Section 1256 Contracts Marked to Market
(a) Identification of account (b) (Loss) (c) Gain

2 Add the amounts on line 1 in columns (b) and (c) . . . . . . . . 2 ( )

3 Net gain or (loss). Combine line 2, columns (b) and (c) . . . . . . . . . . . . . . . . . . 3
4 Form 1099-B adjustments. See instructions and attach statement . . . . . . . . . . . . . . . 4
5 Combine lines 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Note: If line 5 shows a net gain, skip line 6 and enter the gain on line 7. Partnerships and S corporations, see
instructions.
6 If you have a net section 1256 contracts loss and checked box D above, enter the amount of loss to be carried
back. Enter the loss as a positive number. If you didn’t check box D, enter -0- . . . . . . . . . . . 6

7 Combine lines 5 and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

8 Short-term capital gain or (loss). Multiply line 7 by 40% (0.40). Enter here and include on line 4 of Schedule D or
on Form 8949 (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 8
9 Long-term capital gain or (loss). Multiply line 7 by 60% (0.60). Enter here and include on line 11 of Schedule D
or on Form 8949 (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . 9
Part II Gains and Losses From Straddles. Attach a separate statement listing each straddle and its components.
Section A—Losses From Straddles
(f) Loss.
(g) (h) Recognized loss.
(b) Date If column (e)
(c) Date (e) Cost or other Unrecognized If column (f) is more
entered (d) Gross is more than (d),
(a) Description of property closed out basis plus gain on than (g), enter
into or sales price enter difference.
or sold expense of sale offsetting difference.
acquired Otherwise, enter
positions Otherwise, enter -0-.
-0-.

10

11a Enter the short-term portion of losses from line 10, column (h), here and include on line 4 of Schedule D or on
Form 8949. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . 11a ( )
b Enter the long-term portion of losses from line 10, column (h), here and include on line 11 of Schedule D or on
Form 8949. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . 11b ( )
Section B—Gains From Straddles
(b) Date (f) Gain. If column
(c) Date (e) Cost or other
entered (d) Gross (d) is more than (e),
(a) Description of property closed out basis plus
into or sales price enter difference.
or sold expense of sale
acquired Otherwise, enter -0-.

12

13a Enter the short-term portion of gains from line 12, column (f), here and include on line 4 of Schedule D or on Form
8949. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . 13a
b Enter the long-term portion of gains from line 12, column (f), here and include on line 11 of Schedule D or on Form
8949. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . 13b
Part III Unrecognized Gains From Positions Held on Last Day of Tax Year. Memo Entry Only (see instructions)
(e) Unrecognized
(c) Fair market value (d) Cost or other gain. If column (c) is
(b) Date
(a) Description of property on last business day basis more than (d), enter
acquired
of tax year as adjusted difference. Otherwise,
enter -0-.

14

For Paperwork Reduction Act Notice, see instructions. Cat. No. 13715G Form 6781 (2019)
Form 6781 (2019) Page 2

Section references are to the Internal Mark-to-Market Rules Box B. Straddle-by-Straddle

Revenue Code unless otherwise noted. Under these rules, each section 1256 Identification Election
Future Developments contract held at year end is treated as if Make this election for mixed straddles
it were sold at fair market value (FMV) on according to Temporary Regulations
For the latest information about the last business day of the tax year. The section 1.1092(b)-3T(d) by clearly
developments related to Form 6781 and wash sale rules don’t apply. identifying each position by the earlier of
its instructions, such as legislation (a) the close of the day the identified
If your section 1256 contracts produce
enacted after they were published, go to mixed straddle is established, or (b) the
capital gain or loss, gains or losses on
www.irs.gov/Form6781. time the position is disposed of. No
section 1256 contracts open at the end
of the year, or terminated during the straddle-by-straddle identification
General Instructions year, are treated as 60% long term and election may be made for any straddle
40% short term, regardless of how long for which a mixed straddle election was
Purpose of Form the contracts were held. made or if one or more positions are
Use Form 6781 to report: includible in a mixed straddle account. If
The mark-to-market rules don’t apply
you are making or have previously made
• Any capital gain or loss on section if you properly and timely identified a
this election, check box B.
1256 contracts under the mark-to- section 1256 contract as a hedge.
market rules, and If you make this election, any positions
Straddle you held on the day before the election
• Gains and losses under section 1092 are deemed sold for their fair market
A straddle means offsetting positions
from straddle positions. value at the close of the last business
with respect to personal property of a
For details on section 1256 contracts type that is actively traded. day before the day of the election. For
and straddles, see Pub. 550, Investment elections made on or before August 18,
Income and Expenses. Offsetting Positions 2014, take this gain or loss into account
If there is a substantial decrease in risk when computing taxable income for the
Section 1256 Contract of loss to a taxpayer holding a position year in which the election was made. For
A section 1256 contract is any: because that taxpayer or a related party elections made after August 18, 2014,
also holds one or more other positions, take this gain or loss into account in the
• Regulated futures contract,
then those positions are offsetting and year you would have reported the gain or
• Foreign currency contract, may be part of a straddle. However, if an loss if the identified mixed straddle had
• Nonequity option, identified straddle is properly not been established. In addition, when
• Dealer equity option, or established, other positions held by the the gain or loss that accrued prior to the
taxpayer won’t be treated as offsetting time the identified mixed straddle was
• Dealer securities futures contract. with respect to any position that is part established is taken into account, it will
For definitions of these terms and of the identified straddle. have the same character it would have
more details, see section 1256(g) and had if the identified mixed straddle had
Pub. 550. General Rule for Straddles not been established. See Regulations
A section 1256 contract doesn’t If you don’t make any of the elections section 1.1092(b)-6 for details.
include any securities future contract, described in box A, B, or C, and you Each year you hold positions subject
option on a securities future contract, have a loss on the section 1256 contract to this election, you must mark to market
interest rate swap, currency swap, basis component, use Part II to reduce the your section 1256 contracts and
swap, commodity swap, equity swap, loss by any unrecognized gain on the determine, in accordance with
equity index swap, credit default swap, non-section 1256 contract component Regulations sections 1.1092(b)-3T and
interest rate cap, interest rate floor, or before making an entry in Part I. You 1.1092(b)-6, whether you have a net gain
similar agreement. also must reduce the loss from any or loss. If the net gain or loss is
section 1256 contract component of a attributable to a net non-section 1256
Special rules apply to certain foreign straddle that would be a mixed straddle
currency contracts. See section 988 and position, then the net gain or loss is
if the positions had been properly treated as a short-term capital gain or
Regulations sections 1.988-1(a)(7) and identified as such.
1.988-3. If an election is made under loss. Enter it directly on Form 8949 and
section 988(a)(1)(B) or 988(c)(1)(D), attach Box A. Mixed Straddle Election identify the election. If the net gain or
to your return a list of the contracts loss is attributable to a section 1256
Under section 1256(d), you can elect to position, enter the gain or loss on Form
covered by the election(s). On the have the mark-to-market rules not apply
attachment, show the net gain or loss 6781, Part I, and identify the election.
to section 1256 contracts that are part of
reported from those contracts and a mixed straddle. A mixed straddle is Box C. Mixed Straddle Account
identify where the gain or loss is any straddle in which at least one but not Election
reported on the return. If an election is all of the positions is a section 1256
made under section 988(a)(1)(B), report Make this election according to
contract. On the day the first section Temporary Regulations section
on Form 6781 the gains and losses from 1256 contract forming part of the
section 1256 contracts that are also 1.1092(b)-4T(f) to establish one or more
straddle is acquired, each position mixed straddle accounts for 2020 by the
section 988 transactions. forming part of the straddle must be due date (without extensions) of your
Options and commodities dealers clearly identified as being part of such 2019 tax return. To make this election,
must take any gain or loss from the straddle. If you make this election, it will check box C and attach to your return
trading of section 1256 contracts into apply for all later years and you can’t (or your request for an extension of time
account in figuring net earnings subject revoke it without IRS consent. If you are to file) the statement required by the
to self-employment tax. See section making or have previously made this regulations. Report the annual account
1402(i). election, check box A and report the net gain or loss from a mixed straddle
section 1256 component in Part II account in Part II and identify the
instead of Part I. election. See Temporary Regulations
section 1.1092(b)-4T(c)(4) for limits on
the total annual account net gain or loss.
Form 6781 (2019) Page 3

Box D. Net Section 1256 Contracts column (a), write “Form 1099-B” and the Line 6
Loss Election broker’s name. List separately each See the instructions for box D.
transaction for which you didn’t receive
If you have a net section 1256 contracts a Form 1099-B or substitute statement, Line 8
loss for 2019, you can elect to carry it or received a Form 1099-B that isn’t for
back 3 years. Corporations, Include this amount on Schedule D
your tax year. (Form 1040 or 1040-SR), line 4; or on
partnerships, estates, and trusts aren’t
eligible to make this election. Your net If you are completing an amended Schedule D (Form 1041), line 4.
section 1256 contracts loss is the 2019 Form 6781 to carry back a net For other returns, enter it in Part I of a
smaller of: section 1256 contracts loss from 2020 or Form 8949 with box B checked (if you
a later year, report the carryback on line received a Form 1099-B or substitute
• The excess of your losses from 1. Enter “Net section 1256 contracts loss
section 1256 contracts over the total of statement for every transaction included
carried back from” and the tax year in on line 1) or box C checked (if you can’t
(a) your gains from section 1256 column (a), and enter the amount of the
contracts plus (b) $3,000 ($1,500 if check box B). Enter “Form 6781, Part I”
loss carried back to 2019 in column (b). on line 1 in column (a). Enter the gain or
married filing separately), or See the instructions for box D for details. (loss) in column (h). Leave all other
• The total you would figure as your columns blank.
short-term and long-term capital loss Line 4
carryovers to 2020 if line 6 of Form 6781 For information about how to Line 9
were zero. Use a separate Schedule D
(Form 1040 or 1040-SR) and Capital
Loss Carryover Worksheet (in Pub. 550)
▲
! elect to defer capital gain net
income because you invested
CAUTION in a Qualified Opportunity
Include this amount on Schedule D
(Form 1040 or 1040-SR), line 11; or on
Schedule D (Form 1041), line 11.
to figure this amount. Fund (QOF), see the Instructions for
Form 8949. Don’t use line 4 to show the For other returns, enter it in Part II of a
The amount you can carry back to any Form 8949 with box E checked (if you
prior year is limited to the smaller of: adjustment for a QOF-related deferral.
received a Form 1099-B or substitute
• The gain, if any, that you would report If the Form 1099-B you received statement for every transaction included
on line 16 of Schedule D (Form 1040 or includes a straddle or hedging on line 1) or box F checked (if you can’t
1040-SR) for that carryback year if only transaction (as defined in section check box E). Enter “Form 6781, Part I”
gains and losses from section 1256 1256(e)(2)), you may need to make on line 1 in column (a). Enter the gain or
contracts were taken into account; or certain adjustments listed next. Attach a (loss) in column (h). Leave all other
statement listing each of these columns blank.
• The gain, if any, reported on line 16 of adjustments and enter the total(s) on
Schedule D (Form 1040 or 1040-SR) for line 4. Part II
that carryback year.
• The section 1256 contract part of a Use Section A for losses from positions
The amounts just described are mixed straddle, if you made any of the that are part of a straddle. Generally, a
figured prior to any carryback from the mixed straddle elections. loss is allowed to the extent it exceeds
loss year. Also, the carryback is allowed the unrecognized gain on offsetting
only to the extent it doesn’t increase or • The amount of the loss, if you didn’t
make any of the mixed straddle elections positions. The part of the loss not
produce a net operating loss for the allowed is treated as if incurred in the
carryback year. The loss is carried to the or the straddle wasn’t identified as a
mixed straddle and you had a loss on following year and is allowed to the
earliest year first. same extent. However, a loss from a
the section 1256 contract part that was
Make the election by checking box D less than the unrecognized gain on the position established in an identified
and entering the amount to be carried non-section 1256 contract part. If the straddle after October 21, 2004, isn’t
back on line 6. To carry your loss back, unrecognized gain is less than the loss, allowed. Instead, the basis of each
file Form 1045, Application for Tentative enter the unrecognized gain. Use Part I offsetting position in the identified
Refund, or an amended return. Attach an for a loss on the disposition of one or straddle that has unrecognized gain is
amended Form 6781 and an amended more positions that are part of a mixed increased by the amount of the
Schedule D (Form 1040 or 1040-SR) for straddle and that are non-section 1256 unallowed loss multiplied by the
the applicable years. positions if no disposition of a non- following fraction:
On the amended Forms 6781 for the section 1256 position in the straddle The unrecognized gain (if any) on the
years to which the loss is carried back, would be a long-term capital gain or offsetting position
report the carryback on line 1 of that loss, and the disposition of one or more
year’s amended Form 6781. Enter “Net section 1256 positions in the straddle The total unrecognized gain on all
section 1256 contracts loss carried back would be a capital gain or loss. positions that offset the loss position
from” and the tax year in column (a), and in the identified straddle.
• The section 1256 contract part of a
enter the amount of the loss carried hedging transaction. The gain or loss on For more details, see Pub. 550,
back in column (b). a hedging transaction is treated as chapter 4.
ordinary income or loss. See Pub. 550 Use Section B for gains from positions
Specific Instructions for details. that are part of a straddle.
Line 5 Don’t include in Part II a disposition of
Part I any of the following.
Partnerships enter the amount from line
Line 1 5 on Form 1065, Schedule K, line 11. • A position that is part of a hedging
Include on line 1 all capital gains and Electing large partnerships enter the transaction.
losses from section 1256 contracts open amount from line 5 on Form 1065-B, Part • A loss position included in an identified
at the end of your tax year or closed out II, line 5. S corporations enter the straddle established before October 22,
during the year. If you received a Form amount from line 5 on Form 1120-S, 2004, unless you disposed of all of the
1099-B, Proceeds From Broker and Schedule K, line 10. Lines 6 through 9 on positions making up the straddle.
Barter Exchange Transactions, or Form 6781, Part I, don’t apply to
substitute statement, include on line 1 partnerships or S corporations and are
the amount from box 11 of each form. In left blank.
Form 6781 (2019) Page 4

• A loss position included in an identified For other returns, enter it in Part I of a Part III
straddle established after October 21, Form 8949 with box C checked. Enter
2004. “Form 6781, Part II” on line 1 in column Complete Part III by listing each position
(a). Enter the (loss) as a negative number (whether or not part of a straddle) that
• A position that is part of a straddle if all you held at the end of the tax year
of the positions of the straddle are (in parentheses) in column (h). Leave all
other columns blank. (including any position you are treated as
section 1256 contracts. holding because it is held by a related
Line 10, Column (a) Line 11b party) if the FMV of the position at such
Include this amount on Schedule D time exceeds your cost or other basis as
Enter the property and delivery date, and adjusted.
indicate whether the property is a long or (Form 1040 or 1040-SR), line 11; or on
short position. Schedule D (Form 1041), line 11. Don’t include positions that are part of
For other returns, enter it in Part II of a an identified straddle or hedging
Line 10, Column (d) Form 8949 with box F checked. Enter transaction, property that is stock in
For positions closed out or sold, enter “Form 6781, Part II” on line 1 in column trade or inventory, or property subject to
the closing price or sales price. (a). Enter the (loss) as a negative number depreciation used in a trade or business.
(in parentheses) in column (h). Leave all Don’t complete Part III if you don’t
Line 10, Column (e) other columns blank. have a recognized loss on any position
For positions closed out or sold, enter (including section 1256 contracts).
Line 13a
the cost or other basis plus commissions
paid. Include nondeductible interest and Include this amount on Schedule D Paperwork Reduction Act Notice. We
carrying charges allocable to personal (Form 1040 or 1040-SR), line 4; or on ask for the information on this form to
property that is part of a straddle. If any Schedule D (Form 1041), line 4. carry out the Internal Revenue laws of
part of an unallowed loss from an For other returns, enter it in Part I of a the United States. You are required to
offsetting position established in an Form 8949 with box C checked. Enter give us the information. We need it to
identified straddle after October 21, “Form 6781, Part II” on line 1 in column ensure that you are complying with these
2004, increased your basis in the (a). Enter the gain in column (h). Leave all laws and to allow us to figure and collect
position, also include that amount. See other columns blank. the right amount of tax.
Pub. 550 for details. You are not required to provide the
Line 13b information requested on a form that is
Line 10, Column (f) Include this amount on Schedule D subject to the Paperwork Reduction Act
Include in this column any loss not (Form 1040 or 1040-SR), line 11; or on unless the form displays a valid OMB
allowed in the prior year to the extent of Schedule D (Form 1041), line 11. control number. Books or records
the unrecognized gain. For other returns, enter it in Part II of a relating to a form or its instructions must
Line 10, Column (g) Form 8949 with box F checked. Enter be retained as long as their contents
“Form 6781, Part II” on line 1 in column may become material in the
Enter the unrecognized gain on positions (a). Enter the gain in column (h). Leave all administration of any Internal Revenue
offsetting those in columns (a) through other columns blank. law. Generally, tax returns and return
(f). Include unrecognized gain on any information are confidential, as required
position you are treated as holding Collectibles gain or (loss). A
by section 6103.
because it is held by a related party. collectibles gain or (loss) is any
long-term gain or deductible long-term The time needed to complete and file
Figure the amount to enter in this column
loss from the sale or exchange of a this form will vary depending on
by subtracting the cost or other basis of
collectible that is a capital asset. individual circumstances. The estimated
the offsetting position from the
Collectibles include works of art, rugs, burden for individual taxpayers filing this
settlement price of that position as of the
antiques, metals (such as gold, silver, form is approved under OMB control
close of the last business day of your
and platinum bullion), gems, stamps, number 1545-0074 and is included in the
2019 tax year.
coins, alcoholic beverages, and certain estimates shown in the instructions for
Lines 11 and 13 other tangible property. their individual income tax return. The
Separate recognized gains and losses estimated burden for all other taxpayers
If any of the gain or loss you reported
into short term and long term. Attach a who file this form is shown below.
in Part II is a collectibles gain or (loss)
separate statement for each. For and you are filing Form 1040, 1040-SR, Recordkeeping . . . . 8 hr., 36 min.
information about holding periods for or 1041, follow the instructions below for Learning about the
straddle positions, see Pub. 550 and the form you file. law or the form . . . 1 hr., 57 min.
Temporary Regulations section Form 1040 or 1040-SR. If you Preparing the form . . 3 hr., 7 min.
1.1092(b)-2T. checked “Yes” on line 17 of Schedule D Copying, assembling,
Attach separate statements for (a) (Form 1040 or 1040-SR), include the and sending the form
section 988 contracts that are part of a collectibles gain or (loss) from Part II on to the IRS . . . . . . . . 16 min.
mixed straddle, and (b) any gain on the line 3 of the 28% Rate Gain Worksheet
disposition or other termination of any in the Instructions for Schedule D (Form If you have comments concerning the
position held as part of a conversion 1040 or 1040-SR). accuracy of these time estimates or
transaction (as defined in section suggestions for making this form
Form 1041. If you must complete the simpler, we would be happy to hear from
1258(c)). Identify the net gain or loss and 28% Rate Gain Worksheet in the
report it on Form 4797, line 10. you. See the instructions for the tax
Instructions for Schedule D (Form 1041), return with which this form is filed.
Line 11a include the collectibles gain or (loss)
from Part II on line 3 of that worksheet.
Include this amount on Schedule D
(Form 1040 or 1040-SR), line 4; or on
Schedule D (Form 1041), line 4.