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To: DM who wrote (5535)3/25/2000 4:00:00 PM
From: London Brian  Respond to of 8096
 
These questions get asked all the time on this thread:
IRS, Tax related strategies--Traders
Subject 5727

From everything I have read, Covered Calls (non leap) that expire worthless are all short term gains. CC's which get assigned to you are treated short or long based on how long you held the underlying.

This is important to consider when writing CC's. If you've got big gains in something you've held for 10 months, maybe you don't want to write a one month cc. Go 2 months to make sure you get the long term.

-Brian (nothing depresses me more than watching how my tax dollars get spent.)



To: DM who wrote (5535)3/25/2000 9:33:00 PM
From: Bridge Player  Read Replies (5) | Respond to of 8096
 
<< If you sell covered calls on stock you own, then that will reduce your cost basis, no tax is due until you sell the stock.

This is per my CPA.>>

Your CPA is incorrect. I suggest that he double check the tax law. A simple reading of Publication 550 per 2 earlier posts of mine tonight will establish his error.

I also suggest that you start doing business with a new CPA.

BP


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