7586 / What are securities futures contracts?

A securities futures contract will generally not be treated as a commodity futures contract for purposes of the Internal Revenue Code. (An exception exists for dealer securities futures contracts.)³ Thus, holders of these contracts generally are not subject to the mark-to-market rules of IRC Section 1256 (see Q 7592) and are not eligible for 60 percent long-term capital gain and 40 percent short-term capital gain treatment. Instead, gain or loss on these contracts will be recognized under the general rules relating to the disposition of property.⁴ For the tax treatment of securities futures contracts generally, and the treatment of such contracts under the rules governing short sales, wash sales, and straddles, see Q 7587.