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

To: Uncle Frank who wrote (6437)	4/13/2000 8:12:00 PM
From: Jill	Read Replies (1) \| Respond to of 8096

Hmmm. Ed has done this for years maybe he will comment.

To: Uncle Frank who wrote (6437)	4/14/2000 10:17:00 AM
From: edamo	Respond to of 8096

frank..."wash rule" very gray area...run it by your accountant if you look at code sec. 1234(a) it defines an option as "a right to buy or sell property at a stipulated price on or before a specified date" question i've been asking of the irs for years is "the short sale of a put contract or the writing of a covered call, does not meet the intent of code section definition, as the seller has "no right", whereas the buyer has the "right". the buyer can manipulate to his advantage, the seller is at the mercy of the buyer...as both positions are considered "short"...then would not code section 1233 "short sales" apply? this section clearly states "the holding period of the substantially identical property is considered to begin on the date the short sale is closed" it is my understanding that on the sale of a put or call, you can take the losses, the wash sale does not apply, and if assigned the cumulative premiums in the string of transactions are applied to your cost basis. if not assigned as it is an open contract the losses can be offset by any future gains. if it was so clear cut the irs would require reporting of all options transactions on a 1099, but as the contracts have so many variables it would be impossible to do so...this is why it is important to keep accurate records, should the irs challenge you.