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Easy cost basis question
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MZB
Mar 24, 2012, 8:19:39 AM3/24/12
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Two cases:
1) I buy 100 shares of XYZ and sell a call. The cal gets assigned, so my
100 shares are called away. I know this doesn't impact the final
gain/loss BUT: Is the premium added on to the sales proceeds or is the
cost basis reduced by the premium?
st
2) Analagous situation: I sell short 100 shares of XYZ. I also sell a
PUT. The PUT expires in the money so that I am again assigned, this time
having to BUY 100 shares of XYZ. I request that my position be closed
out. So, once again, do I add the option premium to my proceed from the
short sale of do I reduce my cost of closing out the position by the
option proceeds?
Mel
1) I buy 100 shares of XYZ and sell a call. The cal gets assigned, so my
100 shares are called away. I know this doesn't impact the final
gain/loss BUT: Is the premium added on to the sales proceeds or is the
cost basis reduced by the premium?
st
2) Analagous situation: I sell short 100 shares of XYZ. I also sell a
PUT. The PUT expires in the money so that I am again assigned, this time
having to BUY 100 shares of XYZ. I request that my position be closed
out. So, once again, do I add the option premium to my proceed from the
short sale of do I reduce my cost of closing out the position by the
option proceeds?
Mel
Arthur Kamlet
Mar 25, 2012, 10:00:02 PM3/25/12
to
http://www.irs.gov/pub/irs-pdf/p550.pdf
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
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