Options tax reporting.

Discussion in 'Taxes and Accounting' started by RaidenDSI, Mar 22, 2007.

  1. Hi, can someone please tell me how to report options trades? 2006 was my first year trading options and I am not sure how to report them as they are not reported on the 1099 form that my broker sent me nor are they required to be reported according to them. Thanks.
  2. Unfortunately you have to go through all your monthly statements. Find all instances of where you sold any options, and then backtrack to where you initially purchased them to get a cost basis.

    Wash sale rules still apply to options as well. As an example, this is what you would write on Schedule D for an option transaction:

    10 Call ABCDE
    5 Put ABCDE

    Option symbols are usually 5 letters. Then just list the dates you bought/sold and the dollar amounts (trading fees included). Column (e) is just the amount you initially bought it at. If you bought/sold a position at different times, instead of entering a specific date you would write in "Various", and then just consolidate all the amounts.
  3. your broker sucks then. many brokers show all your buys and sells on a non reported 1099
  4. What about options that expire? I have some that expired.
    I am not too familiar with what a wash sale it. Iwill look it up. Thank you.
  5. raiden what broker do you use? many brokers you can download all your trades to a sch d software that will figure it out
  6. Just write in "Expired" in column (d) for sales price.

    A wash sale is simply not being able to count a loss if you purchased the same stock within 30 days (before and after) of when you sold. So basically it's a 60-day window. So if you sold option ABCDE for a loss, but sometime within the 60-day window you bought option ABCXY (same company but different option) or bought the stock ABC itself, then that's considered a wash sale. So then you can't count the loss.
  7. My broker does that also. That is what I meant by not reported. I'm sorry if I didn't make that clear.
  8. I've been using Scottrade. I have not heard of this schedule D software that you speak of. What is some of it called?
  9. Would that go the same for gains also? What if you lost the first time, then rebought options or stock in the same company and lost again within 60 days? Would you only count the second loss or would you not be able to count anything at all?
  10. A gain is a gain. There are no wash sale rules for gains, only for losses. (As a side note, every time I point this out, I get irritated as hell. Uncle sam is always sharing with you for the gains, but you are totally alone when it comes to losses. GRRRRRR)

    You would then carry over the first loss amount to your COST BASIS of the second transaction. Like a rollover effect, so your cost basis is now reduced. It can get pretty hairy trying to keep track of dollar amounts when you got multiple carryovers.
    #10     Mar 22, 2007