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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: posthumousone who wrote (758)	3/12/1998 1:04:00 PM
From: James Unterburger	Respond to of 5810

I know nothing about options.

To: posthumousone who wrote (758)	3/12/1998 1:23:00 PM
From: VincentTH	Read Replies (1) \| Respond to of 5810

Read Pub 550. Colin is the definitive answer , but IMHO, that would be subject to wash sale. Note that the following is not subject to wash sale (IMHO): Buy stock at $20. Sold the 20 strike call option for 2 Buy back the call at $4 at a net loss of $2, all within the 60 day window. The last buy is not subject to wash sale since the security is substantially different. For your case, the purchase of the call option is to substitute it for stock, hence substantially identical. For this case, the purchase of the call is not to intend to substitute it for the underlaying stock.

To: posthumousone who wrote (758)	3/16/1998 1:03:00 AM
From: Cents	Read Replies (3) \| Respond to of 5810

OFF TOPIC: Things I learned after filing with the taxman today. I learned: 1. One's income is broken into parts and are subjected to different tax rates depending on the amount. For the first time my husband and I are in the 15% tax bracket (28% previous years) even though he made more money from bonuses. But his taxable income was reduced as a result of his increased contributions to 401K and bc of the increase of the lower tax bracket. The lower tax bracket moves up a little each year adjusting for inflation. 2. Capital gains is taxed at same rate as regular income until you exceed the level for next tax bracket; but then only the portion that exceeds is subjected to the next higher rate. Imagine my surprise when I found out that all my short-term gains for the year (which was not alot to begin with) was taxed at 15% instead of the 40% that I thought it would. 3. The definition of a stock wash is more technical than just the 31 days rule than I had thought. My taxman will look for the true definition for me and I will post it when received. He says to just follow "First In, First Out" (FIFO) rule to avoid stockwashing. So from that, it seems to me that Gary you do not have a stock wash....as long as you keep your transactions separate, your loss is tax-deductible. 4. Stock commissions and losses, Options that expire worthless or contracts sold for a loss are all tax-deductible. This also includes options commissions. That's about it. The tax session cleared up alot for me, and I hope this post helps some of you. If I've been misinformed to anything stated above, any response is very much appreciated. Cents