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Strategies & Market Trends : Selling Puts: Have Cash Will Travel -- Ignore unavailable to you. Want to Upgrade?

To: Robert T. Quasius who wrote (1170)	4/10/2000 8:44:00 AM
From: OX	Respond to of 1235

have you checked the tax code? it rarely covers options (much less LEAPS) in any serious detail. here's my source... the best source on options-related tax... not definitive, but works for me... there are lots of things not logical for tax treatment of options (60/40 index option rule... where's the reasoning for that?) cboe.com (prepared for the option exchanges by Ernst & Young) "If the writer?s obligation expires, the premium is short-term capital gain to the writer upon expiration, regardless of the length of time the call was outstanding. " btw, I find that most CPA's and tax ppl, unless they understand options well, don't understand the complex tax treatment of options... ask them if they know what a section 1256 contract is, what a mix straddle is, what constitutes a qualified CC? if they can answer that off the top of their head, you've got a great start.

To: Robert T. Quasius who wrote (1170)	4/10/2000 9:31:00 AM
From: KFE	Read Replies (2) \| Respond to of 1235

Robert, OX is right about short sale of options and it is in the code. Of course broad based index options are section 1256 contracts and are always 60% long term and 40% short term regardless of how long held and whether short or long. You can check IRS publications linked below. ftp.fedworld.gov irs.ustreas.gov The question I can't seem to find an answer to is whether options on QQQ are section 1256 contracts. Regards, Ken