Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next
Author: bclstu One star, 50 posts Mission Olympia 2 Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120812  
Subject: Wash sale on rolling covered calls? Date: 9/26/2013 2:14 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hello all,

The general question is, Is rolling a covered call using the same strike but a different month fall under the wash sale rule?

Specifically, I own a deep in the money covered call with a January '14 expiration. I have a large unrealized long term cap gain on the stock and a (not as large) unrealized loss on the covered call option. I am willing to let the stock get called away come January, but I would like to realize the loss on the option this year and delay the gain on the stock until next year (and I want to keep the stock covered, as I believe it may be overvalued at this point). I have owned the underlying for a couple years so my question is not about long term vs. short term.

Come November or December, can I just roll the covered call out to sometime next year, say February or March in order to realize the loss on the option for 2013, or would that be considered a wash sale and delay the realizing the loss on the option until 2014? Does the strike price matter - the new call would be deep in the money as well.

I know that any responses are not tax advise, just opinions.
Thanks for any input.

Stu.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next

Announcements

Disclaimer:
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.
2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
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.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.
Advertisement