Reporting and Location

§ 1256 gains and losses go on Form 6781, not on Schedule D directly; the form computes the 60/40 split and carries the two halves to Schedule D. Your broker reports the aggregate year-end mark in box 8–11 of Form 1099-B, “Proceeds From Broker and Barter Exchange Transactions”, which is one of the few places where the broker’s number and your return should agree without adjustment.

Location follows from everything above: hold § 1256 products in a taxable account. The 60/40 rate and the three-year carryback are worth nothing inside an IRA, where every dollar comes out as ordinary income anyway, and the carryback election is destroyed outright. This is counterintuitive enough that it gets its own treatment in section “The Four Reasons to Keep Derivatives Out”.