Form 6781

Department of the Treasury 

Internal Revenue Service 

Gains and Losses From Section 1256 

Contracts and Straddles 

▶ Go to www.irs.gov/Form6781 for the latest information.

▶ Attach to your tax return. 

OMB No. 1545-0644 

2018

Attachment 

Sequence No. 82

Name(s) shown on tax return Identifying number 

Check all applicable boxes (see instructions). A Mixed straddle election 

B Straddle-by-straddle identification election 

C Mixed straddle account election 

D Net section 1256 contracts loss election 

Part I Section 1256 Contracts Marked to Market 

(a) Identification of account (b) (Loss) (c) Gain 

1 

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 

(a) Description of property 

(b) Date 

entered 

into or 

acquired 

(c) Date 

closed out

or sold 

(d) Gross

sales price 

(e) Cost or 

other basis 

plus 

expense of 

sale 

(f) Loss. 

If column (e) 

is more than 

(d), enter 

difference. 

Otherwise, 

enter -0-

(g) 

Unrecognized 

gain on 

offsetting 

positions 

(h) Recognized loss. 

If column (f) is more 

than (g), enter 

difference. 

Otherwise, enter -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 

(a) Description of property 

(b) Date 

entered 

into or 

acquired 

(c) Date 

closed out

or sold 

(d) Gross

sales price 

(e) Cost or other

basis plus 

expense of sale 

(f) Gain. If column

(d) is more than (e), 

enter difference. 

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) 

(a) Description of property (b) Date

acquired 

(c) Fair market value on last 

business day of tax year 

(d) Cost or other basis

as adjusted 

(e) Unrecognized gain. 

If column (c) is more 

than (d), enter difference. 

Otherwise, enter -0-

14 

For Paperwork Reduction Act Notice, see instructions. Cat. No. 13715G Form 6781 (2018) 
Form 6781 (2018) Page 2 

Section references are to the Internal 

Revenue Code unless otherwise noted. 

Future Developments

For the latest information about 

developments related to Form 6781 and its 

instructions, such as legislation enacted 

after they were published, go to 

www.irs.gov/Form6781.

What’s New

Special rules for capital gains invested 

in Qualified Opportunity Funds. In 2018, if 

you have a capital gain, you can invest that 

gain into a Qualified Opportunity Fund. You 

may elect to defer part or all of the gain 

that you would otherwise include in income 

until December 31, 2026. You may also be 

able to permanently exclude gain from the 

sale or exchange of an investment in a 

Qualified Opportunity Fund if the 

investment is held for at least 10 years. For 

information about how to elect to use these 

special rules, see the Instructions for Form 

8949. There are some limitations on the 

capital gains eligible for the special rules. 

For example, these special rules generally 

only allow you to defer capital gain net 

income from section 1256 contracts. For 

more information on the special rules see 

Proposed Regulation section 

1.1400Z-2(a)-1.

General Instructions 

Purpose of Form 

Use Form 6781 to report: 

• Any capital gain or loss on section 1256 

contracts under the mark-to-market rules, 

and 

• Gains and losses under section 1092 

from straddle positions. 

For details on section 1256 contracts 

and straddles, see Pub. 550, Investment 

Income and Expenses. 

Section 1256 Contract 

A section 1256 contract is any: 

• Regulated futures contract, 

• Foreign currency contract, 

• Nonequity option, 

• Dealer equity option, or 

• Dealer securities futures contract. 

For definitions of these terms and more 

details, see section 1256(g) and Pub. 550. 

A section 1256 contract doesn’t include 

any securities future contract, option on a 

securities future contract, interest rate 

swap, currency swap, basis swap, 

commodity swap, equity swap, equity index 

swap, credit default swap, interest rate cap, 

interest rate floor, or similar agreement.

Special rules apply to certain foreign 

currency contracts. See section 988 and 

Regulations sections 1.988-1(a)(7) and 

1.988-3. If an election is made under 

section 988(a)(1)(B) or 988(c)(1)(D), attach 

to your return a list of the contracts 

covered by the election(s). On the 

attachment, show the net gain or loss 

reported from those contracts and identify 

where the gain or loss is reported on the 

return. If an election is made under section 

988(a)(1)(B), report on Form 6781 the gains 

and losses from section 1256 contracts 

that are also section 988 transactions. 

Options and commodities dealers must 

take any gain or loss from the trading of 

section 1256 contracts into account in 

figuring net earnings subject to 

self-employment tax. See section 1402(i).

Mark-to-Market Rules 

Under these rules, each section 1256 

contract held at year end is treated as if it 

were sold at fair market value (FMV) on the 

last business day of the tax year. The wash 

sale rules don’t apply. 

If your section 1256 contracts produce 

capital gain or loss, gains or losses on 

section 1256 contracts open at the end of 

the year, or terminated during the year, are 

treated as 60% long term and 40% short 

term, regardless of how long the contracts 

were held. 

The mark-to-market rules don’t apply if 

you properly and timely identified a section 

1256 contract as a hedge.

Straddle 

A straddle means offsetting positions with 

respect to personal property of a type that 

is actively traded. 

Offsetting Positions

If there is a substantial decrease in risk of 

loss to a taxpayer holding a position 

because that taxpayer or a related party 

also holds one or more other positions, 

then those positions are offsetting and 

may be part of a straddle. However, if an 

identified straddle is properly established, 

other positions held by the taxpayer won’t 

be treated as offsetting with respect to any 

position that is part of the identified 

straddle. 

General Rule for Straddles

If you don’t make any of the elections 

described in Boxes A, B, or C, and you 

have a loss on the section 1256 contract 

component, use Part II to reduce the loss 

by any unrecognized gain on the nonsection 1256 contract component before 

making an entry in Part I. You also must 

reduce the loss from any section 1256 

contract component of a straddle that 

would be a mixed straddle if the positions 

had been properly identified as such. 

Box A. Mixed Straddle Election 

Under section 1256(d), you can elect to 

have the mark-to-market rules not apply to 

section 1256 contracts that are part of a 

mixed straddle. A mixed straddle is any 

straddle in which at least one but not all of 

the positions is a section 1256 contract. On 

the day the first section 1256 contract 

forming part of the straddle is acquired, 

each position forming part of the straddle 

must be clearly identified as being part of 

such straddle. If you make this election, it 

will apply for all later years and you can’t 

revoke it without IRS consent. If you are 

making or have previously made this 

election, check box A and report the 

section 1256 component in Part II instead 

of Part I. 

Box B. Straddle-By-Straddle 

Identification Election 

Make this election for mixed straddles 

according to Temporary Regulations 

section 1.1092(b)-3T(d) by clearly 

identifying each position by the earlier of 

(a) the close of the day the identified mixed 

straddle is established or (b) the time the 

position is disposed of. No straddle-bystraddle identification election may be 

made for any straddle for which a mixed 

straddle election was made or if one or 

more positions are includible in a mixed 

straddle account. If you are making or have 

previously made this election, check box B.

If you make this election, any positions 

you held on the day before the election are 

deemed sold for their fair market value at 

the close of the last business day before 

the day of the election. For elections made 

on or before August 18, 2014, take this 

gain or loss into account when computing 

taxable income for the year in which the 

election was made. For elections made 

after August 18, 2014, take this gain or loss 

into account in the year you would have 

reported the gain or loss if the identified 

mixed straddle had not been established. 

In addition, when the gain or loss that 

accrued prior to the time the identified 

mixed straddle was established is taken 

into account, it will have the same 

character it would have had if the identified 

mixed straddle had not been established. 

See Regulations section 1.1092(b)-6 for 

details.

Each year you hold positions subject to 

this election, you must mark to market your 

section 1256 contracts and determine, in 

accordance with Regulations sections 

1.1092(b)-3T and 1.1092(b)-6, whether you 

have a net gain or loss. If the net gain or 

loss is attributable to a net non-section 

1256 position, then the net gain or loss is 

treated as a short-term capital gain or loss. 

Enter it directly on Form 8949 and identify 

the election. If the net gain or loss is 

attributable to a section 1256 position, 

enter the gain or loss in Part I of Form 6781 

and identify the election.

Box C. Mixed Straddle Account 

Election 

Make this election according to Temporary 

Regulations section 1.1092(b)-4T(f) to 

establish one or more mixed straddle 

accounts for 2019 by the due date (without 

extensions) of your 2018 tax return. To 

make this election, check box C and attach 

to your return (or your request for an 

extension of time to file) the statement 

required by the regulations. Report the 

annual account net gain or loss from a 

mixed straddle account in Part II and 

identify the election. See Temporary 

Regulations section 1.1092(b)-4T(c)(4) for 

limits on the total annual account net gain 

or loss. 
Form 6781 (2018) Page 3 

Box D. Net Section 1256 Contracts 

Loss Election 

If you have a net section 1256 contracts 

loss for 2018, you can elect to carry it 

back 3 years. Corporations, partnerships, 

estates, and trusts aren’t eligible to make 

this election. Your net section 1256 

contracts loss is the smaller of: 

• The excess of your losses from section 

1256 contracts over the total of (a) your 

gains from section 1256 contracts plus (b) 

$3,000 ($1,500 if married filing separately), 

or 

• The total you would figure as your shortterm and long-term capital loss carryovers 

to 2019 if line 6 of Form 6781 were zero. 

Use a separate Schedule D (Form 1040) 

and Capital Loss Carryover Worksheet (in 

Pub. 550) to figure this amount. 

The amount you can carry back to any 

prior year is limited to the smaller of: 

• The gain, if any, that you would report on 

line 16 of Schedule D (Form 1040) for that 

carryback year if only gains and losses 

from section 1256 contracts were taken 

into account, or 

• The gain, if any, reported on line 16 of 

Schedule D (Form 1040) for that carryback 

year. 

The amounts just described are figured 

prior to any carryback from the loss year. 

Also, the carryback is allowed only to the 

extent it doesn’t increase or produce a net 

operating loss for the carryback year. The 

loss is carried to the earliest year first. 

Make the election by checking box D 

and entering the amount to be carried 

back on line 6. To carry your loss back, file 

Form 1045, Application for Tentative 

Refund, or an amended return. Attach an 

amended Form 6781 and an amended 

Schedule D (Form 1040) for the applicable 

years. 

On the amended Forms 6781 for the 

years to which the loss is carried back, 

report the carryback on line 1 of that 

year’s amended Form 6781. Enter “Net 

section 1256 contracts loss carried back 

from” and the tax year in column (a), and 

enter the amount of the loss carried back 

in column (b). 

Specific Instructions 

Part I 

Line 1 

Include on line 1 all capital gains and 

losses from section 1256 contracts open at 

the end of your tax year or closed out 

during the year. If you received a Form 

1099-B, Proceeds From Broker and Barter 

Exchange Transactions, or substitute 

statement, include on line 1 the amount 

from box 11 of each form. In column (a), 

write “Form 1099-B” and the broker’s 

name. List separately each transaction for 

which you didn’t receive a Form 1099-B or 

substitute statement, or received a Form 

1099-B that isn’t for your tax year. 

If you are completing an amended 2018 

Form 6781 to carry back a net section 

1256 contracts loss from 2019 or a later 

year, report the carryback on line 1. Enter 

“Net section 1256 contracts loss carried 

back from” and the tax year in column (a), 

and enter the amount of the loss carried 

back to 2018 in column (b). See the 

instructions for box D for details. 

Line 4 

If the Form 1099-B you received includes a 

straddle or hedging transaction (as defined 

in section 1256(e)(2)), you may need to 

make certain adjustments listed next. 

Attach a statement listing each of these 

adjustments and enter the total(s) on line 4. 

• The section 1256 contract part of a mixed 

straddle, if you made any of the mixed 

straddle elections. 

• The amount of the loss, if you didn’t 

make any of the mixed straddle elections 

or the straddle wasn’t identified as a mixed 

straddle and you had a loss on the section 

1256 contract part that was less than the 

unrecognized gain on the non-section 1256 

contract part. If the unrecognized gain is 

less than the loss, enter the unrecognized 

gain. Use Part I for a loss on the disposition 

of one or more positions that are part of a 

mixed straddle and that are non-section 

1256 positions if no disposition of a nonsection 1256 position in the straddle 

would be a long-term capital gain or loss, 

and the disposition of one or more section 

1256 positions in the straddle would be a 

capital gain or loss. 

• The section 1256 contract part of a 

hedging transaction. The gain or loss on a 

hedging transaction is treated as ordinary 

income or loss. See Pub. 550 for details. 

Line 5 

Partnerships enter the amount from line 5 

on Form 1065, Schedule K, line 11. 

Electing large partnerships enter the 

amount from line 5 on Form 1065-B, Part 

II, line 5. S corporations enter the amount 

from line 5 on Form 1120S, Schedule K, 

line 10. Lines 6 through 9 in Part I of Form 

6781 don’t apply to partnerships or S 

corporations and are left blank. 

Line 6 

See the instructions for box D. 

Line 8 

Include this amount on Schedule D (Form 

1040), line 4; or on Schedule D (Form 

1041), line 4. 

For other returns, enter it in Part I of a 

Form 8949 with Box B checked (if you 

received a Form 1099-B or substitute 

statement for every transaction included on 

line 1) or Box C checked (if you can’t check 

Box B). Enter “Form 6781, Part I” on line 1 

in column (a). Enter the gain or (loss) in 

column (h). Leave all other columns blank.

Line 9 

Include this amount on Schedule D (Form 

1040), line 11; or on Schedule D (Form 

1041), line 11.

For other returns, enter it in Part II of a 

Form 8949 with Box E checked (if you 

received a Form 1099-B or substitute 

statement for every transaction included on 

line 1) or Box F checked (if you can’t check 

Box E). Enter “Form 6781, Part I” on line 1 

in column (a). Enter the gain or (loss) in 

column (h). Leave all other columns blank.

Part II 

Use Section A for losses from positions 

that are part of a straddle. Generally, a 

loss is allowed to the extent it exceeds the 

unrecognized gain on offsetting positions. 

The part of the loss not allowed is treated 

as if incurred in the following year and is 

allowed to the same extent. However, a 

loss from a position established in an 

identified straddle after October 21, 2004, 

isn’t allowed. Instead, the basis of each 

offsetting position in the identified straddle 

that has unrecognized gain is increased by 

the amount of the unallowed loss multiplied 

by the following fraction: 

The unrecognized gain (if any) on the 

offsetting position 

The total unrecognized gain on all positions 

that offset the loss position in the identified 

straddle. 

For more details, see Pub. 550, chapter 

4. 

Use Section B for gains from positions 

that are part of a straddle. 

Don’t include in Part II a disposition of 

any of the following. 

• A position that is part of a hedging 

transaction. 

• A loss position included in an identified 

straddle established before October 22, 

2004, unless you disposed of all of the 

positions making up the straddle. 

• A loss position included in an identified 

straddle established after October 21, 

2004. 

• A position that is part of a straddle if all of 

the positions of the straddle are section 

1256 contracts. 

Line 10, Column (a) 

Enter the property and delivery date, and 

indicate whether the property is a long or 

short position. 

Line 10, Column (d) 

For positions closed out or sold, enter the 

closing price or sales price. 
Form 6781 (2018) Page 4 

Line 10, Column (e) 

For positions closed out or sold, enter the 

cost or other basis plus commissions paid. 

Include nondeductible interest and carrying 

charges allocable to personal property that 

is part of a straddle. If any part of an 

unallowed loss from an offsetting position 

established in an identified straddle after 

October 21, 2004, increased your basis in 

the position, also include that amount. See 

Pub. 550 for details. 

Line 10, Column (f) 

Include in this column any loss not allowed 

in the prior year to the extent of the 

unrecognized gain. 

Line 10, Column (g) 

Enter the unrecognized gain on positions 

offsetting those in columns (a) through (f). 

Include unrecognized gain on any position 

you are treated as holding because it is 

held by a related party. Figure the amount 

to enter in this column by subtracting the 

cost or other basis of the offsetting position 

from the settlement price of that position 

as of the close of the last business day of 

your 2018 tax year. 

Lines 11 and 13 

Separate recognized gains and losses into 

short-term and long-term. Attach a 

separate statement for each. For 

information about holding periods for 

straddle positions, see Pub. 550 and 

Temporary Regulations section 

1.1092(b)-2T.

Attach separate statements for (a) 

section 988 contracts that are part of a 

mixed straddle, and (b) any gain on the 

disposition or other termination of any 

position held as part of a conversion 

transaction (as defined in section 1258(c)). 

Identify the net gain or loss and report it on 

Form 4797, line 10. 

Line 11a 

Include this amount on Schedule D (Form 

1040), line 4; or on Schedule D (Form 

1041), line 4.

For other returns, enter it in Part I of a 

Form 8949 with Box C checked. Enter 

“Form 6781, Part II” on line 1 in column (a). 

Enter the (loss) as a negative number (in 

parentheses) in column (h). Leave all other 

columns blank.

Line 11b 

Include this amount on Schedule D (Form 

1040), line 11; or on Schedule D (Form 

1041), line 11.

For other returns, enter it in Part II of a 

Form 8949 with Box F checked. Enter 

“Form 6781, Part II” on line 1 in column (a). 

Enter the (loss) as a negative number (in 

parentheses) in column (h). Leave all other 

columns blank.

Line 13a 

Include this amount on Schedule D (Form 

1040), line 4; or on Schedule D (Form 

1041), line 4.

For other returns, enter it in Part I of a 

Form 8949 with Box C checked. Enter 

“Form 6781, Part II” on line 1 in column (a). 

Enter the gain in column (h). Leave all other 

columns blank.

Line 13b 

Include this amount on Schedule D (Form 

1040), line 11; or on Schedule D (Form 

1041), line 11.

For other returns, enter it in Part II of a 

Form 8949 with Box F checked. Enter 

“Form 6781, Part II” on line 1 in column (a). 

Enter the gain in column (h). Leave all other 

columns blank.

Collectibles gain or (loss). A collectibles 

gain or (loss) is any long-term gain or 

deductible long-term loss from the sale or 

exchange of a collectible that is a capital 

asset. Collectibles include works of art, 

rugs, antiques, metals (such as gold, silver, 

and platinum bullion), gems, stamps, 

coins, alcoholic beverages, and certain 

other tangible property. 

If any of the gain or loss you reported in 

Part II is a collectibles gain or (loss) and 

you are filing Form 1040 or Form 1041, 

follow the instructions below for the form 

you file. 

Form 1040. If you checked “Yes” on line 

17 of Schedule D (Form 1040), include the 

collectibles gain or (loss) from Part II on line 

3 of the 28% Rate Gain Worksheet in the 

Instructions for Schedule D (Form 1040). 

Form 1041. If you must complete the 

28% Rate Gain Worksheet in the 

Instructions for Schedule D (Form 1041), 

include the collectibles gain or (loss) from 

Part II on line 3 of that worksheet. 

Part III 

Complete Part III by listing each position 

(whether or not part of a straddle) that you 

held at the end of the tax year (including 

any position you are treated as holding 

because it is held by a related party) if the 

FMV of the position at such time exceeds 

your cost or other basis as adjusted. 

Don’t include positions that are part of 

an identified straddle or hedging 

transaction, property that is stock in trade 

or inventory, or property subject to 

depreciation used in a trade or business. 

Don’t complete Part III if you don’t have 

a recognized loss on any position 

(including section 1256 contracts). 

Paperwork Reduction Act Notice. We 

ask for the information on this form to 

carry out the Internal Revenue laws of the 

United States. You are required to give us 

the information. We need it to ensure that 

you are complying with these laws and to 

allow us to figure and collect the right 

amount of tax. 

You are not required to provide the 

information requested on a form that is 

subject to the Paperwork Reduction Act 

unless the form displays a valid OMB 

control number. Books or records relating 

to a form or its instructions must be 

retained as long as their contents may 

become material in the administration of 

any Internal Revenue law. Generally, tax 

returns and return information are 

confidential, as required by section 6103. 

The time needed to complete and file 

this form will vary depending on individual 

circumstances. The estimated burden for 

individual taxpayers filing this form is 

approved under OMB control number 

1545-0074 and is included in the estimates 

shown in the instructions for their individual 

income tax return. The estimated burden 

for all other taxpayers who file this form is 

shown below. 

Recordkeeping . . . . 10 hr., 31 min. 

Learning about the 

law or the form . . . . 1 hr., 57 min.

Preparing the form . . . 3 hr., 9 min. 

Copying, assembling, 

and sending the form 

to the IRS . . . . . . . . 16 min.

If you have comments concerning the 

accuracy of these time estimates or 

suggestions for making this form simpler, 

we would be happy to hear from you. See 

the instructions for the tax return with 

which this form is filed.