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Hi Fools,

1. Does rolling written puts/calls out to a new month and/or different strike at a loss to that original option carry a wash-sale to the new option? (Of course same underlyer)

I think I am hearing here that it does not...only if the CUSIP is the same (and that won't happen once you change month or strike). I have been counting roll outs as wash sales when rolling an option that was currently losing.


2. This year my broker sent me no option activity on my 1099...though I made a load of option trades. Is that OK? Am I just on my honor reporting my option trades this time?

I'm hearing that some brokers don't send option transactions(nor are actually required to) . This would be a first for me. True?


Thanks a ton,

mpfd
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1. Does rolling written puts/calls out to a new month and/or different strike at a loss to that original option carry a wash-sale to the new option? (Of course same underlyer)

I think I am hearing here that it does not...only if the CUSIP is the same (and that won't happen once you change month or strike). I have been counting roll outs as wash sales when rolling an option that was currently losing.


What I think you can conclude from the exchange of ideas between Peter and me is that brokers only have to report wash sales when the CUSIP number is identical, but that is not the only determinant of a wash sale.

I believe that certainly a change in expiration date would constitute a new security and would be willing to accept that a change in strike price would as well. Peter was less liberal in his interpretation of what constitutes a different security. He felt that two options that would experience the same price movement because the strike price(s) were so far away from the current price might be deemed to be substantially identical.


2. This year my broker sent me no option activity on my 1099...though I made a load of option trades. Is that OK? Am I just on my honor reporting my option trades this time?

That's what the broker is supposed to do. Options trades are not reportable on Form 1099-B. The effect of option execution on the underlying security's trades is reportable by the appropriate adjustment to the cost basis or sales proceeds.

I'm hearing that some brokers don't send option transactions(nor are actually required to) . This would be a first for me. True?

As stated above, yes. Brokers are not required to report option transactions to you at year end. You are still required to report all income on your tax return.

Ira
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2. This year my broker sent me no option activity on my 1099...though I made a load of option trades. Is that OK? Am I just on my honor reporting my option trades this time?

===========
That's what the broker is supposed to do. Options trades are not reportable on Form 1099-B. The effect of option execution on the underlying security's trades is reportable by the appropriate adjustment to the cost basis or sales proceeds.



just to clarify --they are not required, they ARE allowed, yes?

.. my 1099-Bs do have options activity
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just to clarify --they are not required, they ARE allowed, yes?

.. my 1099-Bs do have options activity


Well, I suppose they are allowed. But I really doubt they did.

Take a close - a very close - look at the options activity you're thinking is on a 1099-B. My guess is that it will say this information is for your reference and is not reported to the IRS.

It comes with the 1099-B, but it's supplemental information for your use and not actually a 1099-B.

I know I'm sounding a bit pedantic here, but sometimes those little details make a difference. And they're making more of a difference this year. Assuming my guess is correct and these options are not on a 1099-B, you'll need to initially enter the options activity on a separate Form 8949, marking box (C) at the top to show the activity is not on a 1099-B. In your tax software, there will be some kind of check box or option box for you to indicate this.

--Peter
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.. my 1099-Bs do have options activity

Well, I suppose they are allowed. But I really doubt they did.

Take a close - a very close - look at the options activity you're thinking is on a 1099-B. My guess is that it will say this information is for your reference and is not reported to the IRS.

It comes with the 1099-B, but it's supplemental information for your use and not actually a 1099-B.



groan. it's worse than that.

you'e right --options NOT on 1099, but on "realized gain/loss report" (along with all other sales)

which i used to type into TT,
and which seems to be what TT gets when it Imports

so yes... i need to mark them all Box 'C' (i had everything Box 'A')

BUT .. noticed on the import that *most* (non-options) were Box 'B' even though basis is on *my* 1099
ie, my 1099 shows stock and fund sales... dates, proceeds & basis for each, but for only a few was basis reported to IRS --and i see no way to distinguish from the 1099
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BUT .. noticed on the import that *most* (non-options) were Box 'B' even though basis is on *my* 1099
ie, my 1099 shows stock and fund sales... dates, proceeds & basis for each, but for only a few was basis reported to IRS --and i see no way to distinguish from the 1099



oops. called broker and they explained there is a non-obvious way to distinguish:
on the 1099B, if box 6 is checked, it was an "uncovered" security and basis for such not reported to IRS
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called broker and they explained there is a non-obvious way to distinguish: on the 1099B, if box 6 is checked, it was an "uncovered" security and basis for such not reported to IRS

I hate to pile on, but one additional caution which may or may not apply to the software you're using.

Depending on the transactions reported a return can require as many as six of the Forms 8949: long-term A, B, C and short-term A, B, C. You'd think that the software would automatically produce all the necessary forms.

Yours may, but TaxWise, which is what we use in VITA/TCE, doesn't. After you've entered all the transactions you have to go back and generate 8949's if you need more than one.

Phil
Rule Your Retirement Home Fool
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just to clarify --they are not required, they ARE allowed, yes?

.. my 1099-Bs do have options activity


No, they are not reported on 1099-B. If you look carefully, your options activity is shown in the supplemental data your broker is providing, not in the official 1099-B.

Ira Smilovitz
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BUT .. noticed on the import that *most* (non-options) were Box 'B' even though basis is on *my* 1099
ie, my 1099 shows stock and fund sales... dates, proceeds & basis for each, but for only a few was basis reported to IRS --and i see no way to distinguish from the 1099


With stock sales it's a bit more difficult. While the 1099-B for sales where the broker isn't required to report cost basis (type B) probably shouldn't have the cost basis info, some brokers are reporting it on the paper statements to account holders and noting in the footnotes that they are not providing this info to the IRS. It would be much "cleaner" if they only reported the required info in the official 1099-B section and saved the extra info that they know (and that the taxpayer needs to complete his return) for the supplemental statements.

Ira
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Depending on the transactions reported a return can require as many as six of the Forms 8949: long-term A, B, C and short-term A, B, C. You'd think that the software would automatically produce all the necessary forms.

Yours may, but TaxWise, which is what we use in VITA/TCE, doesn't.


TurboTax seems to .. automatically calculates short or long, then asks for each transaction whether A, B, or C
( actually seeing 3 8949s: short-A & long-B; short B; short-C )
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It would be much "cleaner" if they only reported the required info in the official 1099-B section and saved the extra info that they know (and that the taxpayer needs to complete his return) for the supplemental statements.



yes ...cleaner. and even more so if they were more clear about what they were reporting (in one place they say, "X means noncovered security" and in another place "noncovered securities do not have basis reported to IRS"
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Thanks All a bunch,

I pretty much have all the info I needed.

What threw me way off also was that Penson changed my account numbers (some back office change?) so the option detail is only from the last month of 2011 which was for my use only. They didn't send the non-IRS reported activity for the other 11 months since the account change.

TurboTax does place the option sales into the 8949 this year as I ran some samples. I always enter manually anyway.

I will continue to count rolled-out options sales at loses as washes sales as I have in the past. I don't carry them too long and if anything its better safe than sorry.

mpfd
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