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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (51147)	11/20/1999 2:30:00 PM
From: PAL	Read Replies (1) \| Respond to of 152472

Are you saying that the income derivce from writing covered leaps calls can never qualify for long term capital gains treatment, even if held for more that 12 months before the buyer exercises them? That is correct. Capital gain/loss refers to gain/loss resulting from the purchase price and sale price of an asset . The holding period is how long you have that asset. If you buy a call or equity, you get an asset, i.e. negotiable financial instrument, and when you sell it, you are no longer owning that asset. Now on the flip side: you open a position by shorting a stock or shorting an option. This is your selling date. You don't own any asset, as a matter of fact you have an obligation , which is not an asset. When close your position, you buy the corresponding stock or option (acquiring an asset) : this is thus the date you acquire the asset. Mathematically your holding period is minus x number of days. Therefore it does not matter whether it is an option or LEAPS, it is always a short term. On the other hand the buyer of LEAPS option can claim LTCG. Don't take my word, check with your tax accountant. Best Paul