How much can I carry back to previous years?

You can elect to carry your net section 1256 contracts loss for 2025 back 3 years. The amount you can carry back to any prior year is limited to the smaller of:

• The gain, if any, that you would report on Line 16 of Schedule D for that carryback year if only gains and losses from section 1256 contracts were taken into account, or;
• The gain, if any, reported on Line 16 of Schedule D for that carryback year.

These amounts must be figured prior to including any carryback from the loss year. Also, the carryback is allowed only to the extent it doesn't increase or produce a net operating loss for the carryback year. The loss should be carried to the earliest year first.

To carry your loss back, file Form 172, Net Operating Losses (NOLs) with Form 1045, Application for Tentative Refund, or an amended return. Attach an amended Form 6781 and Schedule D when you claim these carrybacks. You should report the carryback on Line 1, Column (b) of Form 6781 and enter "Net section 1256 contracts loss carried back from" and the tax year in Column (a).