IRS Form 6781 Instructions

IRS Form 6781
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IRS Form 6781 is not a stand-alone form. In fact, it has to be included with your IRS Form 1040 when you file. Not everyone has to fill out Form 6781. Only taxpayers that need to report a gain or loss for section 1256 contracts need to complete form 6781. According to the Internal Revenue Service, a section 1256 contract can include a foreign currency contract, a nonequity option, a regulated futures contract, a dealer equity option or a dealer securities futures contract.

Step 1

List any gains or losses for the tax year on Line 1. If you have a 1099-B from a broker, the amount on Line 11 from the form will go on Line 1 of the 6781.

Step 2

Add the gains and losses column on Line 2. Combine the two columns on Line 3.

Step 3

Enter any 1099-B adjustment amounts on Line 4, if you have a 1099-B. Combine the amount on Line 4 with Line 3 and list the total on Line 5. Use the instructions on the form to see which lines to fill out once you get your total for Line 5.

Step 4

Complete Part II of the form with details of the gains or losses in the labeled fields. Describe the property, date acquired and sold, cost and amount of loss or gain.

Step 5

List anything you held at the end of the tax year with a fair market value that exceeds the cost in Part III of the form. This part of the form can be left blank.

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