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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: JGoren who wrote (1419)7/11/2001 10:52:13 AM
From: Mike Buckley  Read Replies (1) of 5205
 
JGoren,

I can't figure out how or to what extent my aggregate long-term capital loss nets against my short-term capital gain from selling covered calls.

It's been awhile since I looked at the forms to understand how that works, but I'm reasonably confident that long-term gains are first offset by long-term losses. Any remaining long-term gains are then offset by short-term losses. That ensures that the government collects as much as possible in taxes, rather than allowing long-term losses to offset short-term gains before offsetting long-term gains.

Caveat: I'm not a tax expert.

--Mike Buckley
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