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

To: Dragonfly who wrote (365)	6/24/1998 7:38:00 AM
From: Turboe	Read Replies (2) \| Respond to of 1383

Just changed to 12 months in IRS overhaul-- over 12 is now 20% unless you are in 15% bracket-- then 10%. Anything under 12 months is ordinary income... What is the deal with over 5 years or whatever? Is it really 8%?

To: Dragonfly who wrote (365)	6/24/1998 3:34:00 PM
From: WallStBum	Respond to of 1383

You recognize gain or loss when you sell the stock that you excercised for. Additionally the holding period is reset to the date you excercised. You do not recognize any gain or loss at that point, but your original cost of your options or warrants is added to your cost basis of your stock. Example: Buy 5 Dec25 contracts at $4 (5 x 100 x $4 = $2,000) Excercise in December (holding period starts then) 5 x 100 x $25 = $12,500. Total cost basis $2,000 + $12,500 = $14,500 or $29 per share. If you don't excercise and just trade options, these are no different than stock as far as reporting capital gains and losses. dax