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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: Spots who wrote (3326)6/30/1998 9:33:00 AM
From: Spots  Respond to of 4969
 
>> Both transactions are taxable events.

Duh, a braino (which is like a typo, only higher up).

Only the closing transaction is itself taxable. You
don't incur tax liability for the new opening position
until you close it, conceivably next year.

UNLESS it happens to fall under the strange and wonderful
rules for deep-in-the-money covered options, in which
case the opening transaction can generate a taxable event
(constructive sale) of the underlying security. Or so I'm
told.


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