Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<<Are taxes on income from covered calls and puts considered long term or short term income? Are they e ven considered income? Only when a transaction occurs?
I have had a harad time frinding info on this subject.>>

This is on my list of topics to cover in my web site, but it's not near the top of the list, so don't hold your breath. And the rules are too complicated to give you a full answer in this forum. I can tell you that if you sell a call (covered or not) you generally don't recognize income until the transaction closes one way or the other. When it does, the tax treatment depends on the manner in which it closes. The typical transaction (expiration of the option or a closing transaction in which you buy the offsetting position) generally produces short-term gain. But you should have more detail than this before going forward.

KAT in Chicagoland
Tax Guide for Investors
Includes the latest information on
Roth IRA technical corrections
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.