FAQs: Futures Contract

1. How should I value my futures contracts?

You could value your futures position as the fair market value of the underlying commodities. This would equate to the closing price of the future multiplied by units of the underlying commodity multiplied by the number of contracts you control.

If fair market value information is not readily available, you may choose to provide the following information in Block A: (1) the contract month and year; (2) the number of contracts you control; (3) the closing price of the future; and (4) the notation “(value not readily ascertainable).” For example, you could write, “Silver futures (value not readily ascertainable): December 2013, 10 contracts, 32.20/oz.”

2. What do I report for income?

Income from futures will take the form of capital gains and should be reported by marking the “Capital Gains” column in Block C. Although you will realize your actual gains or losses only upon exiting your futures position, our understanding is that the income gain or loss associated with a position is calculated daily by your brokerage firm for tax purposes. Use the capital gains value amount provided by your broker to determine the applicable income amount category in Block C.

3. I have an interest in several forward contracts. How do I report this interest?

Although similar to futures contracts, forward contracts are not exchange-traded and do not have standard terms. The reporting requirements, therefore, will depend on the exact nature of the forward contracts. Please consult your agency ethics official for additional guidance on how to report your forward contracts. 

 

This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.

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