Section 1256 Contracts (CME Futures)
Trade regulated futures with preferential 60/40 tax treatment instead of ordinary income rates
How It Works
You trade broad-based index or Bitcoin/Ether futures on regulated exchanges like CME instead of the underlying
Section 1256 contracts receive special tax treatment: 60% long-term capital gains, 40% short-term
Your blended rate is roughly 26.8% (for high earners) vs. 37% ordinary income on short-term gains
Losses can offset other Section 1256 gains, and mark-to-market treatment allows carrybacks
Key Benefits
Lower Tax Rate
Pay ~27% blended rate instead of 37% on short-term trading gains
Active Trader Benefit
Ideal for frequent traders who generate short-term capital gains
Loss Carryback
Carry losses back 3 years to recover past taxes paid
Who This Is For
Active traders with $100K+ in annual trading volume who frequently trigger short-term gains. Perfect for day traders, swing traders, and those using leverage or derivatives strategies.
By The Numbers
~27%
Blended Tax Rate
$100K
Minimum Volume
10-15%
Tax Savings vs Spot
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