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

To: Colin Cody who wrote (2095)	3/28/1999 4:56:00 PM
From: Allen Furlan	Read Replies (1) \| Respond to of 5810

Colin, very gracious of you to continue to help so many on this thread. Could you tell me if I am correct? If I sell year 2001 leaps against stock in a margin account and also borrow money to support the purchase, then a) If leaps are initially out of money and the stock rises and leaps are excercised in Jan 2001 then my gains are long term and cost basis is reduced to recognize proceeds of initial option sale. Interest paid on the borrowed money is tax deductible(assuming other profits exceed interest) both in 1999 and 2000. b) Same scenario but initial option is in the money. However my holding period does not commence with initial transaction and I will have short term gains. Interest is still deductible. I am intrigued by potential for covered call writing strategies which combine tax advantages with conservative investment strategy. I am a risk adverse senior. Has this subject been discussed on thread, if so I will go back to beginning and peruse. Thanks for your help.