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Strategies & Market Trends : Options
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To: Theophile who wrote (7989)7/3/2000 4:21:59 PM
From: Bridge Player   of 8096
 
<< take a position with options on stock A
close a position in common on stock A at a loss
31 days later re-open the common position>>

MT, I assume, but have no personal experience yet, that the tax law as it reads (and as quoted in your second post) would mean the following: First, the loss on the common stock A would not be eligible for a loss until you close the position on options on A, and your loss would carry over to affect your cost basis on the options. Second, that the later transaction 31 days later becomes independent and has nothing to do with the first 2.

Is this how you would read it? Very curious as I also will be facing this situation in 2001.

BP
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