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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
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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.

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