Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
(X-post from RYR tax board)

Hey guys,

First time dabbling in options and come tax time lots of headaches. I had a few questions and would be great if any help is forthcoming.
FYI: I am using TurboTax Premier


1) I had written option positions open on 12/31/2009. Do these need to be reported or should I only report them on my 2010 return after they expire?
1a) If I need to report the sales, what do I enter for the purchase information in turboTax??

2) I had written puts that were assigned to me. I was holding the stock as of 12/31/2009. As I understand from Pub 550, I dont have to pay tax on the written puts but my cost basis of the stock gets adjusted.
Do I have to report the Written/Assigned put for 2009 return?
If I do, how do I report it in turboTax without incurring short term gain for the puts?

3) Does rolling covered calls up and out generate a wash sale?
i.e. I wrote a covered call expiring in Dec '09 for $15 strike. Then I bought it back at a loss and wrote another one expiring in Mar '10 for $17 strike. Are these considered substantially identical securities?
My common sense tells me they should. Something I read here led me to believe they are not??

http://boards.fool.com/Message.asp?mid=28345281

3a) If it is a wash sale, how do I enter it in turbotax?
I tried the following:
Entered the sell date/proceeds as the date I wrote the first (Dec 09) options.
entered the purchase date as the date I closed the position.
Indicated that the sale is a part of wash sale and entered the loss amount.

In this case, what it did is added the loss to my cost basis essentially doubled my loss which is clearly wrong.

So how to do it right? Or should I just be leaving it out completely and only enter it next year?


Hopefully I have expressed myself lucidly. If not please feel free to ask for any clarifications.

Thanks!!
Print the post  

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.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.