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#1
01-05-2004, 12:20 AM
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 Re: Covered calls and taxes nickravo[at]earthlink.net (Nick) wrote: - quote - > On my taxes, do I need to specially cite or somehow annotate
How you account for a covered call you sold depends on what> trades that were covered calls? Or can I just list gains (or > losses) from the calls sold -- and then just list the gains > (or losses), if taken, on the stocks? happened to the option. The rules are in Publication 550. You carry the call premium in a suspense account until you buy it back, or the option is exercised, or it expires; you don't report it as income until one of these things happens to close out the option. If you buy it back, the difference is a short-term capital gain or loss. If it expires worthless, the call premium is a short-term capital gain. If it is exercised, add the call premium to the sale price of the stock. If you have a portfolio of stocks that have marketable options and you want out of them, this makes selling in-the-money calls a useful way to collect some extra income taxed at long-term rates. -- Chris Green << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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01-04-2004, 11:40 PM
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| Re: Covered calls and taxes Nick <nickravo[at]earthlink.net> wrote: - quote - > On my taxes, do I need to specially cite or somehow annotate
If the call was not exercised, then on expiration or> trades that were covered calls? Or can I just list gains (or > losses) from the calls sold -- and then just list the gains > (or losses), if taken, on the stocks? subsequent closing of that transaction, you record the transaction on schedule D. If you exercise or get exercised, the option premium is part of the resulting gain or loss on the underlying stock. See IRS Publication 550 for examples. __ Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
01-03-2004, 04:15 AM
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| Covered calls and taxes On my taxes, do I need to specially cite or somehow annotate trades that were covered calls? Or can I just list gains (or losses) from the calls sold -- and then just list the gains (or losses), if taken, on the stocks? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| calls, covered, taxes |
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