The same gain taxed two ways: as Section 1256 contracts, 60% long term and 40% short term whatever the holding period, and as equity options under the ordinary holding period rules. An estimate at the rates you type.
| Net gain for the year | As Section 1256 | As equity options |
|---|---|---|
| $0.00 | $0.00 | $0.00 |
| $25,000.00 | $5,450.00 | $8,000.00 |
| $50,000.00 | $10,900.00 | $16,000.00 |
Options on a broad-based index, such as SPX, XSP, NDX and RUT, are generally Section 1256 contracts: every gain or loss is treated as 60% long term and 40% short term, however long the position was held, and anything open on 31 December is marked to market. Options on SPY, QQQ, IWM and single stocks are equity options and follow the ordinary rules, which for most option trades means short term.
This is an estimate of federal income tax on one line of a return, at the two rates you type, with no brackets, state tax, net investment income tax or wash sale adjustments. Not tax advice: a preparer and the form instructions decide the real number.
No. SPY is an exchange-traded fund, and options on it are equity options taxed under the ordinary holding period rules. SPX options on the index itself are Section 1256 contracts.
Section 1256 60/40 split from a 1099-B · Which options are Section 1256 contracts · Section 1256 on your 1099-B · every calculator
Every price here is one you typed; nothing is fetched and nothing is stored. The numbers travel in the address of this page, so a result can be linked to. Results are at expiry for one structure, before commissions and fees, and assume no early assignment. An illustration of the arithmetic, not advice.