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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Dan Duchardt who wrote (2251)8/26/2001 9:26:31 PM
From: PoetTrader  Read Replies (1) of 5205
 
Dan...thanks for info...here's what CBOE had to say:

"Long Stock and Long Calls
If stock or a call option is acquired and held for more than one year, the resulting gain or loss on sale is a long-term capital gain or loss (maximum tax rate of 20% or 28%, depending on holding period).

If the stock or call is purchased and sold in one year or less, any resulting gain or loss is short-term. Expiration of a call is treated as a sale or exchange on the expiration date and results in a short-term or long-term capital loss, depending on the holding period of the call. If the call is exercised, the premium paid, the strike price, the brokerage commission paid upon exercise, and the commission on the call's purchase are included in the basis of the stock. The holding period of the stock acquired begins on the day after the call is exercised and does not include the holding period of the call." (can someone tell this dummy how to use the damn italics?!!)

So if what they say is the case, why isn't it reported along with the 1099B? Given the fact that the IRS tries to get every little dime it can, why wouldn't they require option income? What does everyone else do? (No, I'm not a member of the IRS!:)

PoetTrader
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