This week, an entire Tax Forum about reporting options trades on your tax return. We won't discuss here what options are or how to use them. For that, browse past Options Forums in the archive. (By the way, we gave Options Forum the week off, since this column is killing two birds with one stone, so to speak.) But before we get to options, a reminder: If you put your 1998 tax return on extension back in August, your drop-dead filing deadline is midnight Friday, Oct. 15. So if you have any under-the-gun questions, send them quickly to
Calls and PutsThe sale and purchase of calls and puts are reported just like those of stocks. Everything goes on
Futures or Index OptionsIf you trade regulated futures contracts, foreign currency contracts or nonequity options (options on stock index futures or broad-based stock indices, such as the S&P 500 index), reporting rules are a little different. Gains and losses on these securities follow the 60/40 rule (see
Shorting Against the BoxIf you attempted to go short against the box, but the
Wash-Sale RuleIf a loss on the sale of a stock or option is disallowed as a result of the
Short PositionsOnly when a short position is closed is there a taxable event. So you only report short sales in the year you cover them. If you are holding an open short position at year-end, you will not owe tax on it. But if you do have open positions on Dec. 31, the gross proceeds reported on your
Less short sales to be reported next year ....... yyyy
Total reported on Schedule D ........ zzzz Show the final number as total sales in column (d) on Schedule D.