IRS Form 6781 Walkthrough (Gains and Losses From Section 1256 Contracts and Straddles) 

how do you report future contract loss or gain?

I wasn't able to find a specific reference for this either. However, many similar form instructions will tell you to use additional versions of the same form to report all required entries, then combine them in the subsequent steps on just one form. In my opinion, you probably could do this, or you could net all 1099-B reported transactions together, then separately net similarly reported transactions, so that you have 3 lines. If this doesn't work for you, you can always contact the IRS and ask for additional guidance.

@@teachmepersonalfinance2169 Thank you very much for replying to my question. Since I am using HR Block software, I doubt it will allow me to use a second form so I was considering 2 entries per line and then combining their amounts to put in the loss column. I am going to try to contact Block to see what they say. It is frustrating to have to even deal with this. I can understand someone who made significant profits or wants to write off a loss but I just chalk it up to $1500 of learning experience and don't want to mess with it on my taxes, especially when it is not making a bit of difference to the return amount. It's just worthless paperwork. Thanks again for the response, I appreciate it very much.

@@teachmepersonalfinance2169 Well I have tried to reply 2 times but for some reason my reply disappears so I will just say thanks for replying and see if this disappears also. Who knows, maybe my reply was deleted because I mentioned the name of software I use for filing yet I said nothing negative in my reply. Thanks youtube.

This depends on a few things: 1. Was this a regulated futures contract that was marked-to-market? If so, there is a rule, called the 60/40 rule. In this case, any gain is subject to capital gains taxes as follows: 60% long-term capital gain 40% short-term capital gain 2. Was this a commodity futures contract that the IRS considers to be a hedging transaction? According to IRS Publication 550, a futures contract is a hedging transaction if you enter into the contract in the ordinary course of your business primarily to manage the risk of interest rate or price changes or currency fluctuations on borrowings, ordinary property, or ordinary obligations. If so, then gains and losses are considered to be ordinary income or loss. 3. Was it a securities futures contract? If so, then gains and losses would typically have the same characteristics as the underlying security.

Part I only covers Section 1256 contracts, such as the following: • Regulated futures contract, • Foreign currency contract, • Nonequity option, • Dealer equity option, or • Dealer securities futures contract Part II covers straddle positions, which are covered by a different section of the tax code.

Correct. According to the form instructions: Don’t complete Part III if you don’t have a recognized loss on any position (including section 1256 contracts).