How do I report my futures trading gains/losses on my tax return?

To report your trading activity on your tax return, follow these steps:

1. Obtain Your 1099-B Form:  

   • Log into your AMP Client Portal to download your substitute 1099-B form. This form summarizes your trading gains and losses for the year.  How do I access my tax documents?

2. Understand Section 1256 Contracts:

   • Futures contracts traded through AMP are considered Section 1256 contracts.
   • These contracts are taxed uniquely: 60% of gains or losses are treated as long-term, and 40% as short-term, regardless of how long you held them.

3. Complete IRS Form 6781:

   • Use the information from your 1099-B to fill out Form 6781: Gains and Losses From Section 1256 Contracts and Straddles.
   • This form calculates your total gains or losses from these contracts.

4. Transfer Totals to Schedule D:

   • The totals from Form 6781 should be entered on Schedule D (Capital Gains and Losses) of your tax return.
   • Schedule D summarizes your overall capital gains and losses, including those from Section 1256 contracts.

Important Notes:

• Mark-to-Market Rule: At the end of each year, Section 1256 contracts are treated as if they were sold at their fair market value. This means you'll report gains or losses even if you haven't sold the contracts.

• Consult a Tax Professional: Tax laws can be complex. It's advisable to seek guidance from a tax advisor to ensure accurate reporting.

For detailed information, please refer to IRS Publication 550 (https://www.irs.gov/publications/p550#en_US_2023_publink100010327)  and the instructions for IRS Form 6781 (https://www.irs.gov/forms-pubs/about-form-6781) .

Important Note: AMP does not provide tax or legal advice.  We recommend that you contact a tax advisor for further guidance if required.