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Author: skeez35 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 266716  
Subject: Tax Question from new fool Date: 12/25/2012 11:04 AM
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I just made my first "put" options trades - when the money went into my broker account it shows up as "non reportable option sales" on the 2012 tax history - At what point in the course of events does option income become taxable?
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Author: TMFSandman Big red star, 1000 posts Feste Award Nominee! Old School Fool Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 259992 of 266716
Subject: Re: Tax Question from new fool Date: 12/25/2012 12:13 PM
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Options transactions aren't currently required to be reported on Form 1099-B, which is what your broker sends to both you and the IRS. That said, you still owe tax on the gain (or conversely can use a loss from options trading to shield other gains), and would report the gain or loss on Schedule D just like you do your gains and losses from stock transactions.

Up until very recently your broker wasn't even required to report the cost basis for any of your trades on Form 1099-B. 2011 was the first year brokers were required to report the cost basis for stocks. The 1099 has been undergoing some upgrades in the last few years, and options reporting is scheduled to be added in 2014:

http://blogs.wsj.com/totalreturn/2012/05/03/irs-delays-cost-...


Mike

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