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Financial Planning / Tax Strategies
URL: http://boards.fool.com/ltlt-1-are-options-treated-as-10068341.aspx
Subject: Re: Wash Sale & Options	Date: 12/22/1997 7:02 PM
Author: TMFTaxes	Number: 986 of 127536
<< 1) Are options treated as "like" securities with stocks? If I sell some stock at a loss and buy options, is that treated as a wash sale also? If so, would I just increase the cost-basis of the purchased options?>> The law states that if you have a loss sale, and enter into an option to purchase additional shares of that "identical" stock, then you have generated a wash sale with respect to the initial loss sale. <<2) I buy and sell Nov expiration calls at a loss. Within the 30 days, (when the Nov would expire anyways) I purchase some Feb calls. Is this a wash sale? >> Nope. At least I don't believe so. Based upon the regulations, I don't see these different options as "substantially identical" property. I believe that IRS intended to include options in the wash sale definition, but they have never written the regulations to interpret the law as such. TMF Taxes Roy
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