Fillable Form 6781

What is Form 6781?

Form 6781, Gains and Losses From Section 1256 Contracts and Straddles, is an Internal Revenue Service (IRS) form used by investors and traders to report gains and losses from straddles or financial contracts. Form 6781 has separate sections for straddles and Section 1256 contracts.

A section 1256 contract may be any of the following::

• Regulated futures contract
• Foreign currency contract
• Non Equity option
• Dealer equity option
• Dealer securities futures contract

A straddle is a strategy that involves holding contracts that offset the risk of loss from each other. For example, if a trader buys both a call option and a put option for the same investment security at the same time, they have formed a straddle.

Who needs to use Form 6781?

Most investors and traders will need to use IRS Form 6781 when they complete their taxes each year. Because Form 6781 IRS has separate sections for straddles and Section 1256 contracts, investors have to identify the specific type of investment used to be able to properly file the form.

How to fill out Form 6781?

The IRS tax form 6781 is a very simple form to fill out. Be sure to download it in PDF format so as to ensure that the contents and all information entered will remain intact regardless of how the form was submitted. It will also be beneficial to have the relevant documents prepared to make sure that all information entered is updated and correct. If more details on particular steps of the form are required, you may consult the instructions on pages 2 to 4 on this form.

Name(s) as Shown on Tax Return

Write your name as shown on the relevant tax return.

Identifying Number

Enter the identifying number assigned to you.

Check All Applicable Boxes

Check all boxes that apply to what you are filing this form for. You may check one or more of the following:

• Mixed Straddle Election
• Straddle-by-Straddle Identification Election
• Mixed Straddle Account Election
• Net Section 1256 Contracts Loss Election

Part I - Section 1256 Contracts Marked to Market

Line 1 - Column a

Identify the account(s) of the concerned contract(s) in each row.

Line 1 - Column b

Enter the amount of loss on each contract.

Line 1 - Column C

Enter the amount gained from each contract.

Line 2

Add the amounts on Line 1, columns b and c, and enter the sum in the respective columns.

Line 3

Add the amounts on Line 2, columns b and c, and enter the sum.

Line 4

Enter the amount of Form 1099-B adjustments and attach the relevant statement.

Line 5

Add Lines 3 and 4 and enter the sum.

Line 6

If you have a net loss in section 1265 contracts and checked box D above, enter the amount of loss to be carried back as a positive number. If you didn’t check box D, enter -0- instead.

Line 7

Add Lines 5 and 6 and enter the sum.

Line 8

Multiply Line 7 by 40% (0.40) and enter the product here and on Line 4 of Schedule D or on Form 8949 (Sales and other Dispositions of Capital Assets).

Line 9

Multiply Line 7 by 60% (0.60) and enter the product here and on Line 11 of Schedule D or on Form 8949.

Part II - Gains and Losses From Straddles

Make sure to attach a separate statement listing each straddle and its components to this form.

Line 10 - Column a

Enter a short description of each property..

Line 10 - Column b

Enter the dates that each property was acquired or that any agreement was entered into.

Line 10 - Column c

Enter the dates that each property was closed out or sold.

Line 10 - Column d

Enter the gross sales price of each property.

Line 10 - Column e

Enter the cost or other basis plus the expense of the sale for each property.

Line 10 - Column f

If Column e is greater than Column d, enter the difference. Otherwise, enter -0-.

Line 10 - Column g

Enter the amount of unrecognized gain on offsetting positions for each property.

Line 10 - Column h

If Column f is greater than Column e, enter the difference. Otherwise, enter -0-.

Line 11a

Enter the short-term portion of losses from line 10, column (h) here and on Line 4 of Schedule D or on Form 8949.

Line 11b

Enter the short-term portion of losses from line 10, column (h) here and on Line 11 of Schedule D or on Form 8949.

Section B - Gains from Straddles

Line 12 - Column a

Enter a short description of each property.

Line 12 - Column b

Enter the dates that each property was acquired or that any agreement was entered into.

Line 12 - Column c

Enter the dates that each property was closed out or sold.

Line 12 - Column d

Enter the gross sales price of each property.

Line 12 - Column e

Enter the cost or other basis plus the expense of the sale for each property.

Line 12 - Column f

If Column d is greater than Column e, enter the difference. Otherwise, enter -0- instead.

Line 13a

Enter the short-term portion of gains from line 12, column (f), here and on Line 4 of Schedule D or on Form 8949.

Line 13b

Enter the short-term portion of gains from line 12, column (f), here and on Line 11 of Schedule D or on Form 8949.

Part III - Unrecognized Gains from Positions Held on Last Day of Tax Year

Line 14 - Column a

Enter a short description of each property.

Line 14 - Column b

Enter the date that each property was acquired.

Line 14 - Column c

Enter each property’s fair market value on the last business day of the tax year.

Line 14 - Column d

Enter the cost or other basis of each property as adjusted.

Line 14 - Column e

If Column c is greater than Column d, enter the difference. Otherwise, enter -0- instead.

Tips when filling out Form 6781

While the 6781 form is simple to fill out, it is very important to make sure that all information entered is accurate and complete, so it may be beneficial to double-check the form after it has been accomplished.

Make sure all information entered is correct, and that the form is submitted to the appropriate place on time. This will help avoid any consequences for giving the IRS the wrong information and ensure that your application is processed properly.

Practice good contract management. Make sure to keep a copy of the form in a safe and organized area, or even copy it again in order to be doubly sure that you have a backup in case the original is damaged in some way. This will be useful for possible legal purposes in the future, or even simply as a record.