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 

2017

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 (2017) 
Form 6781 (2017) Page 2 

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.

General Instructions 

Section references are to the Internal 

Revenue Code unless otherwise noted. 

Purpose of Form 

Use Form 6781 to report: 

• Any capital gain or loss on section 

1256 contracts under the mark-tomarket 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 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 

non-section 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-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 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 2018 by the 

due date (without extensions) of your 

2017 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 
Form 6781 (2017) Page 3 

section 1.1092(b)-4T(c)(4) for limits on 

the total annual account net gain or loss.

Box D. Net Section 1256 

Contracts Loss Election 

If you have a net section 1256 contracts 

loss for 2017, 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 

short-term and long-term capital loss 

carryovers to 2018 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 

2017 Form 6781 to carry back a net 

section 1256 contracts loss from 2018 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 2017 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. 
Form 6781 (2017) Page 4 

• 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. 

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 2017 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.