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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: VincentTH who wrote (7239)	4/7/1998 10:41:00 PM
From: Herm	Respond to of 14162

Hey Vincent, I just finished my taxes this week and mailed it out today. I used TurboTax Deluxe which is excellent. Your first question is an event which may be more common for CCers. So, that is easier for me to answer since I have never been called on it and McMillan's book does a pretty good job covering the topic. The April 25 CCs and the July 30 CCs are not identical for the underlying stock. Yes, your $3 loss on the first CC is a short term loss. Your second CC gain of $3 is a short term profit. Both would be documented in the current taxable year. Hence, the loss on the first is not considered a wash sale. Have you ever noticed the numbers that are tagged on the option transactions on your statements? Options are "of the same kind" will have the same serial numbers sequence for that expiration strike price. The monthly brokerage statements and the annual statement clearly group the "same kind" options under the same numbers. Another tax awareness worth mentioning for CCers is keeping an accurate accounting of short term or long term loss carryovers from one tax year to another. You certainly want to apply all your losses until you can use them up against your short term/long term gains. Short term losses can only be applied against short term gains and long term losses against long term gains.

To: VincentTH who wrote (7239)	4/10/1998 2:44:00 PM
From: Gary S.	Read Replies (1) \| Respond to of 14162

Hi Herm, Vincent or any other expert, I have a tax related question for you. What exactly is wash sale and hoe it works ? I know that it talks about the fact that if you have a loss in a security and you buy it back within 30 days then you can deduct your loss. I also hear that it doesn't apply if the trades are in the same tax year. Let see for example if i bought 5000 stocks on March 15. then I sell some of it (say 3000) at loss on April 1st and then later on I buy them back at lower price on April 17. Will the wash rule apply to that loss ? I will really appreciate your expert advice on that. Thanks in advance. ps: your right Vincent, even some of the tax preparers are not aware of these rule. Thanks for telling me about this thread.