PSA E*Trade/Morgan Stanley 1099-B Section 1256 Option Income - Filing Taxes

So once again my 1099-B lists my TQQQ option trades as Section 1256 (CSPs, covered calls) all short term trades and only 2 trades were affected by MTM (one in 2023 and one in 2024). This isn't the PSA though some of you may be surprised by your options being treated as 1256.

The PSA is how to properly fill out your tax forms IF you have a profit. First get Form 6781 and see the instructions for filling out Line 1(a) -- simply type in: "Form 1099-B Morgan Stanley" and in 1(c) enter the profit from *line 11* of your 1099-B. Fill out lines 2-5, nothing in line 6, and fill in line 7. Line 8 and 9 splits the profit into 40% short and 60% long term profits. Enter these values on your Schedule D. Leave the rest of Form 6781 blank. Done!