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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Bob Bosco who wrote (6191)	9/12/1999 8:50:00 PM
From: StockHawk	Read Replies (1) of 54805

>OT -Stockhawk: What are the tax consequences of this type of play? I have been considering options for quite awhile but have found it much easier to just buy G&K stocks and hold long term for maximum of 20% capital gain. Question: When you do the initial 2 option plays is the $8600 taxed as ordinary income(short term gain)?< First I'll give you the cautious answer, which is: please do not rely on tax advice received on these boards - especially from me, but rather consult your tax advisor. Next I'll tell you what I think is correct: In general a taxable event occurs in a securities transaction when the position is closed. When you buy a stock you are not taxed until you sell it. If you sell a stock short you are not taxed until you buy the stock (thus closing the position). If you sell an option, the transaction is not closed until you buy it back (or when the option expires). So in the case I presented, if you held the options until expiration in Jan 02 you will have a taxable event (long term) at that time. StockHawk

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