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There's nothing "wrong" or unclear with the letter. It was
written by Tom Donovan, the Pres and CEO of the CBOT.
If the legislation passes, 60/40 treatment will most
definitely =not= apply to every user. It will be revoked
with respect to those who are deemed "professional" futures
traders. Currently, these traders report their gains (or
losses) on form 6781, Part I. 60% are treated as LTCG (or
loss), 40% are treated as STCG (or loss); the amounts are
transferred to Schedule D and taxed accordingly (i.e. =not=
as ordinary income).
I don't quite understand what it is that's unclear about the
foregoing. It's fairly simple; no more CG treatment for
"professional" futures traders if the bill becomes law. What
=is= unclear is whether the IRS will try to extend the term
"professional" to include those who trade futures on a
frequent basis (but who are not floor traders or "dealers").
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>Sometime is wrong and unclear with your letter. 60/40 treatment
>for what are called "1256" contracts applies to EVERY user. It
>has nothing to do with professional status. The rule never had
>anything to do with professional status but rather was an
>outgrowth of the "mixed straddle" rule. You also MUST mark 1256
>contracts to market ... again without regard for status. What
>they ae looking at is a broader definition of the "mixed
>straddle" rule and this would apply to all tradable items ....
>not just options and futures and it appears fairly likely
>....because this area has gotten so much attention
>lately.....that some changes may occur.
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