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Gold/Mining/Energy : TAXES, TAXATION, TAX and Canadian stocks
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To: Sans Souci who started this subject11/1/2000 9:34:23 PM
From: tyc:>  Read Replies (1) of 548
 
1. I believe that trades from the short side are considered to be on the income account. If you make a profit from a short sale, the entire profit is added to taxable income; if you make a loss, the entire loss may be deducted from taxable income. No explanations necessary ! Can anyone confirm this ?

2. I believe also, that this applies to short options as well as short stock. However, I have read that if short puts are exercised (i.e. the stock is put to you), the premium you received from the sale of the put may be used to reduce the acquisition cost of the stock which may then be held for capital gains. Can anyone confirm this ?

3. What is the situation if a naked call is exercised leaving you short the stock ? Must one take the option premium into income as soon as it is exercised ? Or can you simply treat it as part of the proceeds of the short, to be taken into income when the short stock position is closed ?

4 I have been selling naked straddles. When the put side is exercised I propose to treat it as reducing the cost of the stock and seek eventual capital gains. When either side expires worthless the premium will be treated as income, as will also the exercise of the short call.

5 Does anyone know if this is the correct way to do it?
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