ID Reddit Mentions | ChartExchange

Filed my 2025 return this week and it took a Form 8275 disclosure to do it, because my Robinhood 1099 reported a trade backwards: it says +$2,699 on a spread that actually lost $542. I dug all the way to the bottom of why, Robinhood refused to fix it, and the mechanism means a bunch of you are affected too and probably don't know. So here's the writeup.
**The trade (yes I know, roast away, then keep reading)**
12/31/2025, last hour of the year: bought 1 SPXW 0DTE 6925/6920 bear put spread for a 10.42 debit. Yes — $1,042 for a spread that can never pay more than $500. Before you type "guaranteed loss, are you ok": I'd lost track of my PDT day-trade count and had no round trips left, so I couldn't close the position I actually wanted out of. Opening a *fresh* 0DTE spread and letting it ride to settlement costs zero day trades (expiration isn't a close for PDT). It was the only downside hedge available to me at 3:50pm on New Year's Eve, deep ITM quotes were a mile wide, and I paid up for the delta. The spread settled at its full $500 max value — the hedge did its job, the $542 was the premium. Judge the book, not the leg.
**The math**
SPX PM settlement: 6,845.50. Both legs ITM.
- Long 6925P exercised: $7,950.00 proceeds → **+$2,699.04**
- Short 6920P assigned: $7,450.00 cost → **−$3,240.96**
- Net: **−$541.92** (= the 1,041.92 debit minus 500 width, to the penny)
Both legs died the same second on the same print, 12/31/2025.
**What the 1099 says**
Section 1256: +$2,699.04. The short leg is *not on the form*. Not in realized (box 8). Not in open contracts either — box 10 is $0.00. A contract opened and closed in 2025 just doesn't exist on the 2025 1099. It shows up in their **2026** gain/loss report instead, as a −$3,240.96 loss "attributed to tax year 2026."
**The bug**
Trade confirms show both legs: trade date 12/31/2025, settle 1/2/2026. Robinhood's tax engine (GainsKeeper) dates short-sale records by the year the short is *covered* — settled date. That's the correct IRS rule **for shorting stock**. It has nothing to do with options. So the exercised long leg got trade-date logic (2025) and the assigned short leg got covered-date logic (2026). Same spread, two tax years, split by a record-type flag. Robinhood's own 2025 GainsKeeper *summary* page even shows the correct −$541.92 with both legs — their own report contradicts their own 1099.
Kicker: any short index leg that terminates on the **last trading day of any year** settles T+1 in January. This happens every single year, by construction.
**Why there's no legal ambiguity**
§1256 is a closed system. If the contract terminated 12/31 (it did — exercise and assignment are listed termination events in §1256(c)(1)), the loss is 2025. If you want to argue it was somehow still open on 12/31, then §1256(a)(1) marks it to market on 12/31 — same loss, still 2025. There's no reading where it lands in 2026. Their own box 10 = $0.00 concedes nothing was open. Fun fact: §1256 MTM exists *because* Congress killed exactly this kind of year-straddling in 1981.
**The dispute**
Support told me shorts "settle differently" (that's the stock short-sale rule, not options), then told me open 1256 positions get marked to market (nothing was open, see their own box 10). Asked for a corrected 1099 or written confirmation of the event dates. Refused. Case ID on file.
**What I filed**
The correct −$541.92 on Form 6781 — line 1 shows their +2,699.04 so the IRS matching computer ties to the 1099, with the omitted leg listed separately per the line 1 instructions — plus Form 8275 disclosing the whole thing. Next year I file a mirror disclosure backing the loss out of 2026, since their 2026 1099 will double-report it there. Claimed once, documented forever.
**Check yours in 2 minutes**
If you had short SPX/SPXW/XSP legs that closed or got assigned on 12/31: pull your GainsKeeper "Realized Capital Gains & Losses" report and your consolidated 1099. Does the GK summary's 1256 net match box 11? Any short option rows with a Date Close in January? Mismatch = you're affected. And the bias runs against you — assigned shorts are usually losses, so the bug *deletes losses from your current year*. If you filed off a wrong 1099, you overpaid; an amended return within 3 years gets it back. Not tax advice, ask a pro, but any pro who knows 1256 will confirm this in ninety seconds.
**Precedent**
GainsKeeper date conventions have burned 1256 index traders before — InvestmentNews covered TD Ameritrade clients whose year-end marks were computed on the wrong date: https://www.investmentnews.com/ria-news/conflicting-tax-information-creates-nightmares-for-some-investors/79405 GainsKeeper's covered-date short methodology is documented here: https://www.taxportalfaq.com/options
Receipts (statements, GK pages, dispute thread, redacted) available if there's interest.
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*Full disclosure: I used AI to help write this up from my own records — the dispute thread, statements, and actual filings — because I was never going to find the energy to write it myself. Every fact, number, and document in here is mine; the discovery just needed a typist. Happy to answer anything in the comments.*

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