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Non-Tech : Invest / LTD
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To: Thean who wrote (1910)8/18/1998 10:52:00 PM
From: Alski  Read Replies (1) of 14427
 
Thean,
From the 1997 1040 Forms and Instructions:

Gain or Loss From Options
Report on Schedule D gain or loss from the closing or expiration of an option that is not a section 1256 contract, but that is a capital asset in your hands. If a purchased option expired, enter the expiration date in column (c), and write "EXPIRED" in column (d). If an option that was granted (written) expired, enter the expiration date in column (b), and write "EXPIRED" in column (e). Fill in the other columns as appropriate. See Pub. 550 for more details.

For tax purposes a spread or other combination position would be treated as two separate options. I think there may be some caveats in some "substantially identical" property clauses and the new "constructive sales" clauses if you're trading or holding both the common and options but I've not got my head around those yet.
Pub. 550 is definitely important. It's on line at the IRS site, along with a bunch of other good info.
irs.ustreas.gov

Alski
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