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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: Stephen L. Smith who wrote (7514)	5/26/1998 2:40:00 PM
From: Joey Smith	Read Replies (2) \| Respond to of 14162

Tax Question: If I'm writing covered calls, what are the tax implications for the following: 1). Do I get taxed for the premium revenue I receive right away? 2). If I decide to buy back the call at any time, is this treated as a normal capital gains a-la stock securities? 3). If I have to sell the shares at the strike price, is this treated as a normal capital gains? 4). What happens if I let the option expire worthless? Do I have to pay capital gains on the entire premium I received since this is my gain? Thanks in advance for responding. I just want to make sure if I will be taxed twice for doing this: once for receiving the premuim initially and once for the capital gain on the option when I either buy it back or when it expires worthless. joey