First, the initial buy/sell transaction results in a short term capital gain of $20,000 -- YES
Second, with 1000 share purchase, basis = $110 -- YES
Third, with short term loss of $20,000 from the option, creates yet another new basis for the 1000 shares of $130. -- NO you have a deductible short-term capital loss
Fourth, the sale of 500 shares at $100 each equals a short term loss of $15,000 and still maintain a cost basis of $130 for the remaining 500 shares -- NO this is a wash sale. $5,000 loss deferred.
Fifth, the purchase of 500 more shares now creates a new basis of 1000 shares at $105. -- NO your basis is what you paid, $80 plus the deferral of $10
Sixth, the sale of 500 shares at $90 results in another short term loss of $15,000 -- NO this is a $10,000 loss
Current Status if NO other transactions take place:
the short term capital gain ($20,000) is offset by the two short term capital losses of $15,000 each leaving a net loss $10,000 for the year - of which you can take $3,000 for '97 and carry the $7,000 loss forward.
NO your $20,000 gain offsets your $20,000 loss.
You have another $10,000 short-term capital loss
you hold 500 shares with a $90 basis |
