How to report Call Spread on Schedule D

Discussion in 'Options' started by captainbluff, Apr 17, 2007.

  1. I need to know how I would go about reporting Bull Call Spreads on tax form Schedule D. Do I need to report both legs or just the lower strike price? Thanks!
     
  2. Both, of course. Each one is a seperate transaction.
     
  3. You must report all closed positions...

    unless you like bread and water and a wife named Bubba :)
     
  4. I have been trading my IRA; so I have not needed to report anything yet. My questions are:

    1. If one is trading a regular account, will his or her broker (e.g., IB) automatically send a statement to the investor and IRS? Will all trades and all legs of the trades need to be reported? Or only the net profit/loss?

    2. If one is trading an IRA from the beginning of his or her career to retirement, it does not make sense to report every transaction, does it? It could be tens of thousands of transactions in one's career!

    RS
     
  5. nikko309

    nikko309

    1) IB provides a 1040 D for you and the IRS. The IRS requires specific info regardless of whether you use the tax booklet form, your own attached schedules or IB's 1040 D. You can't just list the net gains and losses.

    2) You should maintain proper records of all financial transactions should the IRS ever question you at a later date... at which time you can dump the print outs in their lap and let them sort through them.

    I used to trade at several brokers due to different perks available. At the end of the year I'd give my accountant a separate spreadsheet (on a disk) for each account. He must have had a grudge against the IRS because he'd combine them all into one and print it out. When questioned why, he indicated that we must file correct info. No one says it has to be organized :D