in US,Under the marked to market system, 60% of your capital gain or loss will be treated as a long-term capital gain or loss, and 40% will be treated as a short-term capital gain or loss. This is true regardless of how long you actually held the property.

Section 1256 Contracts Marked to Market

A section 1256 contract is any:

  • Regulated futures contract,
  • Foreign currency contract,
  • Nonequity option,
  • Dealer equity option, or
  • Dealer securities futures contract

Example.

On June 22, 2008, you bought a regulated futures contract for $50,000. On December 31, 2008 (the last business day of your tax year), the fair market value of the contract was $57,000. You recognized a $7,000 gain on your 2008 tax return, treated as 60% long-term and 40% short-term capital gain.

On February 1, 2009, you sold the contract for $56,000. Because you recognized a $7,000 gain on your 2008 return, you recognize a $1,000 loss ($57,000 − $56,000) on your 2009 tax return, treated as 60% long-term and 40% short-term capital loss.