Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Darryl Olson who wrote (23565)	11/8/1999 8:21:00 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 25960

Darryl - (...When writing a covered call, are the proceeds from the call treated as ordinary income? Where does this get reported?) Writing a covered call is NOT a taxable event by itself. The taxable event happens when - a. the call expires worthless, a short term capital gain taxed at ordinary income rates. or b. you buy back the call, creating a short term capital gain or loss. or c. the call is assigned and you deliver stock. In this case the taxes are on the buy and sell of the stock, with the covered call proceeds added to the stock sale proceeds for capital gain calculation. The holding period is from the purchase of the stock until the delivery of the stock at assignment. All of these are reported on Schedule D. Regards, Don