Tax reporting of covered call option I was assigned?

Question

I wrote covered call options which I was assigned.  I understand that I should add the premium received to the proceeds from the associated stock sale and report that on Schedule D on the line for the stock itself.

Do I report the option anywhere on the tax form or does the one line for the sale of the stock cover it all?  If it does, how does the IRS match up that one line on my tax return with the numbers reported to them by my brokerage firm?  All I see on the 1099 is the sale price of the stock itself, not the call option price.

zman492 · Accepted Answer

My 1099's have always shown the sale price of the stock as the total received from selling the option and selling the stock. Since the brokerage has already taken care of adding the the two together I have not had any mismatch to resolve.

If you have confirmed your brokerage has not done that, I still suggest you use only one line on Schedule D, reporting the sale price as the total received from the option and the stock sales. Since you will be reporting that you received more than was reported to the IRS by your brokerage, I would not expect that to raise any red flags. If you want to, it would not hurt to include a note with the Schedule explaining why the figures are different, but I do not believe it would be necessary.

? · Answer

Assigned Options

cutburth · Answer

record it as a jiffy period capital benefit or loss on agenda D. decision proceeds are not to any extent further frequently on the 1099-B out of your broking service notwithstanding the sale remains reportable interior the year the alternative became closed.

Anonymous · Answer

some firm report option separetly on 1099. u still need to report it.

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Tax reporting of covered call option I was assigned?

4 Answers