Basic Covered Call Taxation Question/Wash Sale

Discussion in 'Taxes and Accounting' started by LaxFan, Feb 19, 2020.

  1. LaxFan

    LaxFan

    I have a couple basic taxation questions related to a stock and covered call position I have. Am I correct with my descriptions of the tax situation here?

    Here's my trade history:

    1. Bought 100 XYZ @ 10.85

    2. Sold a covered call $10 strike for .87
    3. Bought back covered call $10 strike for .54 (I will owe tax on the $33 profit)

    4. Sold a covered call $11 strike for .17
    5. Bought back covered call $11 strike for .03 (I will owe tax on the $14 profit)

    6. Sold a covered call $10 strike for .52

    I expect to be have my stock called away at $10 this week.

    7. When my XYZ stock is called away, will my basis be: $10.00 + 0.52= $10.52 - 10.85 for a $33 loss on the stock sale?

    8. If I buy XYZ next week again, then will my $33 loss be considered a wash sale?

    Have I correctly figured the tax situation on #3, #5, and #7?