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Are stocks, options, and futures all considered part of the same basket for tax purposes?

E.g., if one make some profits on stocks and losses on futures, does the IRS allow one to deduct the losses from the profits, or are stocks and futures considered completely separate, and losses from futures can only be deducted from profits on futures?

I'm asking as an unincorporated sole proprietor. Not incorporated as an LLC or some such.

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    Please tag your question with the country you're asking about. – dg99 Sep 5 '14 at 21:01
  • That feels like a hairy enough question that I'd suggest paying a professional for an answer. I don't ask accountants to write programs; I don't ask the Internet questions that involve interpreting edge cases of law. – keshlam Sep 6 '14 at 5:00
  • @keshlam You're right, and any advice I get from StackExchange: I always get second and third opinions for from professionals :-) – thanks_in_advance Sep 6 '14 at 14:49
  • @chris-w-rea Thank you for the neat editing and for adding the US tag. – thanks_in_advance Sep 6 '14 at 14:51
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Short answer:

Yes, profits and losses from stocks, options, and futures can be combined with each other for tax purposes. But different tax forms will need to be filled out.

Long answer:

For stocks, you would report your profits/losses on Form 8949. This is mentioned in the Instructions for Form 8949:

Line 1

Enter all sales and exchanges of capital assets, including stocks

For options (those that are not Section 1256 contracts), you would report your profits/losses on Form 8949. This is mentioned in the Instructions for Schedule D:

Gain or Loss From Options

Report on Form 8949 gain or loss from the closing or expiration of an option that is not a section 1256 contract but is a capital asset in your hands

For futures (and options that are Section 1256 contracts), you would report your profits/losses on Form 6781 (Gains and Losses From Section 1256 Contracts and Straddles). According to that form, Section 1256 contracts include futures contracts and certain types of options:

A section 1256 contract is any:

• Regulated futures contract,

• Foreign currency contract,

• Nonequity option,

• Dealer equity option, or

• Dealer securities futures contract.

So for stocks, options, and futures transactions, you will be filling out Forms 8949 and 6781. Then you will put the totals from those forms onto Schedule D. As you can see from Schedule D, short-term profits/losses from Form 8949 are reported on lines 1b, 2, and 3, and profits/losses from Form 6781 are reported on line 4. On line 7, those totals are combined.

If you have long-term profits/losses from Form 8949, they are reported on lines 8b, 9, and 10, and added up in line 15.

Then lines 7 and 15 are combined in line 16, which is used to fill out Form 1040. So yes, profits/losses (both short-term and long-term) from stocks, options, and futures can be combined with each other.

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