Question

Why can't sell date be before my buy date anymore on "naked" options? On these trades, you sell first

Forum|Forum|5 years ago
October 10, 2020
3 replies
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TurboTax Self Employed Online

Critter-3

Use the BLANK option for the date ...

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A

Anonymous

my broker uses the closing data as both the buy and sell date and that's how it reports those trades to the IRS. true dates don't matter because a short sale that is not hedged is always a short-term capital gain. there is an exception if those options are regulated futures contracts under code sec 1256, then they get reported - no detail needed - on form 6781 and split 60% long-term 40% short-term regardless of the actual holding period.

fanfare

Employee

In order to close a short you must go to the market and acquire some securities.

The acquired date is the date you closed the short sale.
For Stocks, the disposed date is two business days later (settlement).
Options settle in one day.

Note to those for whom it is not obvious: Date Acquired and Date Disposed refer to Columns (b) and (c) on Form 8949 that you will report to the IRS.
Your trade date is the date you closed the position and goes in (b). Settlement date must be calculated taking into account weekends and market holidays.

From this you can see that a simple short is always a short term capital gain or loss, no matter how long you are short.

G

geemoneeAuthor

That is not correct. With options I can I don't have to have a buy to close a position. I can sell a call or put today and depending on what the underlying stock price is on the expiration date, I can simply let it expire. So I have a sell date of today and technically a buy date of the expiration date. That is how I've entered these options in Turbo Tax for years. This year, there is an edit that is not allowing the buy date to be after sell date.