Form 6781 

Department of the Treasury 

Internal Revenue Service 

Gains and Losses From Section 1256 

Contracts and Straddles 

© Attach to your tax return. 

OMB No. 1545-0644 

2009

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 schedule . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . 6 

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

8 Short-term capital gain or (loss). Multiply line 7 by 40% (.40). Enter here and include on the appropriate line 

of Schedule D (see instructions) . . . . . . . . . . . . . . . . . . . . . . . 8 

9 Long-term capital gain or (loss). Multiply line 7 by 60% (.60). Enter here and include on the appropriate line 

of Schedule D (see instructions) . . . . . . . . . . . . . . . . . . . . . . . 9 

Part II Gains and Losses From Straddles. Attach a separate schedule 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 the appropriate line of 

Schedule D (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . 11a ( )

b Enter the long-term portion of losses from line 10, column (h), here and include on the appropriate line of 

Schedule D (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 the appropriate line of 

Schedule D (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . 13a 

b Enter the long-term portion of gains from line 12, column (f), here and include on the appropriate line of 

Schedule D (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 page 4. Cat. No. 13715G Form 6781 (2009) 
Form 6781 (2009) Page 2 

General Instructions 

Section references are to the Internal 

Revenue Code unless otherwise noted. 

Purpose of Form 

Use Form 6781 to report: 

● Any 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. 

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 do not apply. 

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. 

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 will not be treated as offsetting 

with respect to any position which is 

part of the identified straddle. 

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 cannot be 

revoked 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-by-straddle 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 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 Schedule D 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 2010, by 

the due date (without extensions) of your 

2009 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. 

Note. If you did not make any of the 

above elections and you have a loss on 

the section 1256 component, use Part II 

to reduce the loss by any unrecognized 

gain on the non-section 1256 

component before making an entry in 

Part I. You also must reduce the loss 

from any section 1256 component of a 

straddle that would be a mixed straddle 

if the positions had been properly 

identified as such. 

Box D. Net Section 1256 

Contracts Loss Election 

If you have a net section 1256 contracts 

loss for 2009, you can elect to carry it 

back 3 years. Corporations, 

partnerships, estates, and trusts are not 

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 

short-term and long-term capital loss 

carryovers to 2010 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 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 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 does not 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 for the applicable years. 
Form 6781 (2009) Page 3 

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 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 equivalent 

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 did not receive a Form 

1099-B or equivalent statement, or 

received a Form 1099-B that is not for 

your tax year. 

If you are completing an amended 

2009 Form 6781 to carry back a net 

section 1256 contracts loss from 2010 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 2009 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 below. Attach 

a schedule listing each of these 

adjustments and enter the total(s) on 

line 4. 

● The regulated futures part of a mixed 

straddle, if you made any of the mixed 

straddle elections. 

● The amount of the loss, if you did not 

make any of the mixed straddle 

elections or the straddle was not 

identified as a mixed straddle and you 

had a loss on the regulated futures part 

that was less than the unrecognized gain 

on the nonregulated futures 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 

non-section 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 regulated futures 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 do not 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 2; or as a short-term 

capital gain or (loss) on the Schedule D 

for your return and enter “Form 6781, 

Part I” in column (a) of that Schedule D. 

Line 9 

Include this amount on Schedule D 

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

(Form 1041), line 7; or as a long-term 

capital gain or (loss) on the Schedule D 

for your return and enter “Form 6781, 

Part I” in column (a) of that Schedule D. 

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, is not 

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. 

Do not 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. 

Column (a) 

Enter the property and delivery date, 

and indicate whether the property is a 

long or short position. 

Column (d) 

For positions closed out or sold, enter 

the closing price or sales price. 

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). 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 2009 tax year. 

Lines 11 and 13 

Separate recognized gains and losses 

into short-term and long-term. Attach a 

separate schedule. For information 

about holding periods for straddle 

positions, see Pub. 550 and Temporary 

Regulations section 1.1092(b)-2T. Attach 

separate schedules 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. 
Form 6781 (2009) Page 4 

Line 11a 

Include this amount on Schedule D 

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

(Form 1041), line 2; or as a short-term 

capital loss on the Schedule D for your 

return and enter “Form 6781, Part II” in 

column (a) of that Schedule D. 

Line 11b 

Include this amount on Schedule D 

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

(Form 1041), line 7; or as a long-term 

capital loss on the Schedule D for your 

return and enter “Form 6781, Part II” in 

column (a) of that Schedule D. 

Line 13a 

Include this amount on Schedule D 

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

(Form 1041), line 2; or as a short-term 

capital gain on the Schedule D for your 

return and enter “Form 6781, Part II” in 

column (a) of that Schedule D. 

Line 13b 

Include this amount on Schedule D 

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

(Form 1041), line 7; or as a long-term 

capital gain on the Schedule D for your 

return and enter “Form 6781, Part II” in 

column (a) of that Schedule D. 

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. 

Do not 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. 

Do not complete Part III if you do not 

have a recognized loss on any position 

(including regulated futures 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.