IRS Form 6781 with a Section 1256 Carryback Claim
Form 6781 is used to report gains and losses from Section 1256 contracts and straddles. In certain cases, if a taxpayer has a net loss for the year, they can carryback those losses to prior years.
IRS Form 6781 – Section 1256 Gains and Losses
When U.S. taxpayers trade Section 1256 contracts, those gains and losses are treated as capital gains. 40% of the total is short-term capital gain while 60% of the total is long-term capital gain. The gains and losses are reported on Form 6781.