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Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: Neal davidson who wrote (824)	1/8/2000 7:57:00 PM
From: mfamily	Read Replies (1) \| Respond to of 8096

your holding period of the option carries over to the stock on the exercise; so the stock will be long term also

To: Neal davidson who wrote (824)	1/8/2000 8:44:00 PM
From: Labrador	Read Replies (1) \| Respond to of 8096

Holding period starts over upon the exercise of an option. But, as you stated, if you sell the long option, you'll get long-term capital gain (you then cannot defer the gain, as with an option exercise). RIA Explanation ô22,359.38. Property acquired by exercise of option. The holding period of property obtained through the exercise of an option begins the day after the option was exercised. 22 -------------------------------------------------------------------------------- 22. Helvering v. San Joaquin Fruit & Investment Co, (1936, S Ct) 17 AFTR 470, 297 US 496, 80 L Ed 824, 36-1 USTC ô9144, reh den(1936, S Ct) 17 AFTR 483, 297 US 728, 80 L Ed 1011; Frederick, Charles v. U.S., (1968, DC MI) 21 AFTR 2d 603, 68-1 USTC ô9195.

To: Neal davidson who wrote (824)	1/8/2000 11:54:00 PM
From: Didi	Read Replies (1) \| Respond to of 8096

""Option property Your holding period for property you acquire when you exercise an option begins the day after you exercise the option. ..... Holders of calls and puts ...If you sell the call or the put before you exercise it, the difference between its cost and the amount you receive for it is either a long-term or short-term capital gain or loss, depending on how long you held it..."" irs.ustreas.gov .............................................. ""Sec. 1234. Options to buy or sell TITLE 26, Subtitle A, CHAPTER 1, Subchapter P, PART IV, Sec. 1234 STATUTE (a) Treatment of gain or loss in the case of the purchaser (1) General rule Gain or loss attributable to the sale or exchange of, or loss attributable to failure to exercise, an option to buy or sell property shall be considered gain or loss from the sale or exchange of property which has the *same character as the property to which the option relates has in the hands of the taxpayer (or would have in the hands of the taxpayer if acquired by him)"". fourmilab.ch ........................................ If I sell the options, the gain is treated as long term, since I have held the option for longer than a year.* Correct. ............... If, however, I exercise, and then sell the common in 2 months, is the entire gain from the sale of the common considered a short term gain (since I have held the common for less than a year)? Short-term gain. Good luck, Neal. di