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Hi All,
I started a put selling strategy using XSP this year. For those of you who have filed taxes after trading instruments categorized as Section 1256 contracts, is all annual activity collapsed into one line item in your broker's tax statement reporting? And just to confirm, it would then be *net* gains that are assessed for both short- and long-term capital gains taxes, correct?
Correct. Just one single net number you get on your tax document.
That number goes to Form 6781 line 1. And then from there, it's split into 60% LT gains and 40% ST gains in the subsequent forms (Schedule D: Capital Gains and Losses)
Tax season will be fun and easy next year! 🙂
Fantastic, thanks! Great to hear since otherwise I think my accountant would never forgive me for executing hundreds of trades to process.