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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: taxman who wrote (28527)	8/23/1999 8:38:00 PM
From: johnd	Read Replies (3) \| Respond to of 74651

MSFT leap related tax question. In Jan99, I excercised 10 contracts of MSFT Jan99 LEAP. The strike was 140 (pre- split). I had $5 profit on that option that I held for over one year. I still hold the 1000 shares that I excercised at 140. (Now 2000 shares at 70 after split). I plan to hold the shares for a long time. The question the thread is (a) Do I owe taxes on the option profit for 99 year payable April 2000? (b) Also what is the rule on option premium received from covered calls? Do they go against cost basis when eventually shares are sold OR taxes are due upon year of expiration or buyback? Need advice on tax consequence on option excercise & covered call