Need help understanding how local tax treats section 1256 contracts
Hey guys, I was wondering how capital gain from section 1256 contracts would be treated under Philadelphia's School Income Tax (SIT). The SIT taxes short-term capital gains from sale of property held less than 6 months.
The SIT official tax regulation states:
GAINS FROM SALE OF PROPERTY. Gains to be reported as taxable under this Ordinance are those from the sale, exchange, or other disposition of real estate, or of tangible, or intangible personal property, which have been owned by the resident person for a period not exceeding six months before the date of the sale, exchange or other disposition.
IRS says 1256 contracts are taxed 60% long-term and 40% short-term regardless of how long the contract is held, so I was wondering how this rule applies to the SIT tax, if at all.