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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.
"James F. Mazzulla" wrote:
> I just received a rather disturbing letter from the CBOT.
> Perhaps the most disturbing thing is that I hadn't heard of
> the issue being discussed until the letter arrived.
>
> It appears that Uncle Bill has proposed eliminating the
> 60/40 capital gain treatment for professional futures
> traders and option market makers. If enacted into law, gains
> would be taxed as =ordinary income= (i.e. up to 39.6%).
>
> I can't help but wonder how this will affect those who elect
> "trader status" =and= whether, in the not-too-distant
> future, 60/40 treatment will be eliminated for =all= futures
> trades (whether they're done by "professionals" or not).
>
> Further, I wonder whether, if the legislation is enacted,
> the IRS will pull a one-eighty on "trader status" and
> attempt to place =anyone= who trades futures on a regular
> basis into the "professional" category so they can tax the
> gains as OI.
>
> This isn't looking too good at the moment.
>
> Best regards,
> Jim
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