KPMG article: Tax treatment of futures contracts
Update on section 1256 guidance released by the IRS
The IRS released Rev. Rul. 2024-22, which designated the Bourse de Montreal (MX) as a qualified board or exchange (QBE), and Rev. Rul. 2024-23, which designated the European Energy Exchange (EEE) as a QBE. These designations will cause certain contracts traded through these exchanges to be treated as section 1256 contracts after the effective date of the rulings.
Read an April 2025 article* prepared by a KPMG LLP professional that provides an overview of the rulings and each of the following issues:
- The impact on previous reporting provisions
- The effective date of the guidance and transition rules for affected contracts
- The scope of affected contracts
- The interaction of the new section 1256 status for affected contracts with the mixed straddle rules
- The interaction of the new section 1256 status for affected contracts with the rules for dealers and traders in securities under section 475
*This article originally appeared in the Journal of Taxation of Financial Products (Volume 21 No. 4 2025) and is provided with permission.