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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Spots who wrote (2373)	11/10/1999 10:51:00 AM
From: Ira Player	Read Replies (2) \| Respond to of 5810

Spots, I'm not a tax professional, but, to my understanding: Similar to wash rules. You cannot deduct a loss on one part of a straddle while still holding a greater gain on another part. With covered calls, I have been treating that to mean if I sell a call and later buy it back at a loss and roll it forward, I cannot deduct the loss in the current year if the stock position that covered it has a "marked to market" gain that is greater than the loss on the call. If the loss is greater than the unrealized gain on the stock, the excess loss can be taken. Is that correct Colin, Kaye or other experts? Another question. I have been entering butterfly option positions lately by setting the long positions (wings) when I feel the underlying is about to make a short term move up. Then set the short position (body) after the underlying has run up a little and I can get premiums greater than the cost of my longs. This is sometimes not done in the same day. Since they are not done in the same day, it is not an "identified straddle" and I have removed most risk from the position. Should I mark those I have not closed to market at the end of the year? Thanks, Ira