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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (1237)	11/26/2000 10:09:44 AM
From: Dan Duchardt	Read Replies (2) \| Respond to of 1383

dave_s How do you deal with short options at year end? It is an open position. Unless you file as a trader and have elected "mark to market" in advance, there is no gain or loss to declare. This is my opinion based on the source quoted, not expert advise. From the same CBOE link I posted earlier: Premium received for writing a call is not included in income at the time of receipt, but is held in suspense until the writer's obligation to deliver the underlying stock expires or until the writer either sells the underlying stock as a result of the assignment of the call or closes the option (other than by expiration or assignment). 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. and.... Like the call premium, the put premium is held in suspense until the put writer's obligation is terminated. Dan