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Strategies & Market Trends : Options
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To: Seldom_Blue who wrote (7648)5/8/2000 8:23:00 AM
From: edamo   of 8096
 
sb..."tax rules for options writers"

suggest your tax advisor research irc sec. 1234.

you may find that even "wash sale" rules may not apply due to the definition of "closing transaction"....the seller deals in the realm of "economic obligations"....whereas the buyer has a more tangible asset, not an obligation.
when the sold contract either expires, is exercised, or is offset by a closing transaction, then the obligation has been terminated. any new position merely opens a new unrelated obligation....you should discover that sell side put transactions are always short term gains, unless you have an assignment, in that case the long/short gain/loss is determined by how long you hold the assigned stock (premium received adjust down the assigned strike cost basis) a sold call if expires worthless is always short term, if called away long or short with adjusted cost as in the assigned put case.

let me know what your tax advisor states, this is what i have been told for many years
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