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To: Elroy who wrote (2438)	1/18/2007 11:57:11 AM
From: Patrick Slevin	Read Replies (1) \| Respond to of 20435

I'd have to defer to an accountant but I think you have a short term loss. Your basis in ABC is 10 dollars. When you sell the stock at whatever the gain is whatever less 10. If you reported a gain on the calls it would be a double tax.

To: Elroy who wrote (2438)	1/18/2007 12:00:50 PM
From: Patrick Slevin	Respond to of 20435

The only plausible alternative would be to add the coast of the option to the basis of the stock. However I think the previous post is closer to the truth. If you purchased Real Estate by exercising an option to buy your long term coast of the real estate would include the cost of the option. However, in the stock market you have two separate instruments which "should" be treated independently of each other.

To: Elroy who wrote (2438)	1/18/2007 12:24:25 PM
From: Casaubon	Read Replies (2) \| Respond to of 20435

I think you have to adjust the cost basis of the stock by the price of the call option. try this thread for more on the subject. Subject 17266

To: Elroy who wrote (2438)	1/18/2007 8:13:33 PM
From: Sr K	Respond to of 20435

The cost is the option cost including commission plus the stock cost including commission or fee to exercise the option, and the holding period restarts on the option expiration date. It would be slightly different for a LEAP held more than one year before exercise. But exercise is not a taxable event. If you sell at a gain ($14 or so per share now) on 12/17/2007 or later, you will recognize a long-term capital gain, if the sale proceeds exceed the options cost plus the exercise price and any fee your broker charges to exercise that option, because the options in 12/2006 expired on 12/15/2006 and the first trading day a year and a day later is Monday, 12/17/2007.