How are futures trades taxed?

Section 1256 of the Internal Revenue Code treats futures transactions favorably under a 60/40 capital gains rate.

Any futures contract traded on a US exchange, foreign currency contract, dealer equities option, dealer securities futures contract, or nonequity options contract is taxed at 60% of the long-term capital gains rates and 40% of the short-term capital gains rates, regardless of how long the trade was open for. This means the maximum total tax rate is 26.8%.

MetroTrade LLC does not provide investment or tax advice; any decision you may make to buy, sell or hold a futures or securities position on any trading recommendation is entirely your own and not in any way deemed to be endorsed by or attributed to MetroTrade. Please consult a tax advisor for more information specific to your situation.