世爵娱乐平台客服:
Tax Issues

How are covered calls taxed?

The IRS wants to make sure investors do not use deep-in-the-money options when writing covered calls since that would allow investors to possibly:

  • Mismatch gains and losses in different tax years
  • Substantially reduce the risk of holding positions

As a result, the IRS developed the Qualified Covered Call (QCC) rules. Generally, if an investor is seeking to grow the underlying security position to long-term capital gain status, while preserving Qualified Dividend Income (QDI), they should limit their call writing activities to at-the-money and out-of-the-money options with 30 days or more until expiration. However, if an investor utilizes calls with greater than 12 months to expiration, they will have to adjust the Lowest Qualified Benchmark (LQB) by 2% per quarter.

The call premium received from a QCC will be recognized as a short-term capital gain if the option expires or the investor enters into a closing transaction. However, if the option is assigned, the premium will be taxed in accordance with the underlying stock position.

How are protective puts taxed?


If your position in the stock is not eligible for long-term capital gains treatment and you purchase a protective put, your holding period is eliminated. Unfortunately, your holding period will not restart until the put is disposed. However, a put purchase will not affect your holding period if either:

  • The stock is already eligible for long-term capital gains treatment
  • The put is “married” to the stock purchase

In either scenario, Qualified Dividend Income (QDI) is forfeited while the put is in place.



* Please be aware of the fact that tax laws and regulations can change and are subject to varying interpretations. Investors should consult with tax advisors for up-to-date tax advice applying to their particular investments.

'; $('body').prepend(noscript);
  • 晋中市纪委公开曝光五起违反中央八项规定精神问题——晋中频道 2019-02-23
  • 中央国家机关纪工委通报3起醉驾开除党籍案件 2019-02-23
  • 变相“现金贷”重出江湖 利率畸高个别超过1000% 2019-02-22
  • 你来我往!巴萨黑城墙"空中拦网" 澳洲队长点射1-1! 2019-02-22
  • 全新奥迪RS 6 Avant谍照 3.5秒破百明年亮相 2019-02-21
  • 【三年决战奔小康】一封来自甘南精准扶贫户的感谢信 2019-02-21
  • 大国担当!中国引领全球气候治理 2019-02-21
  • 水费欠账竟“穿越”16年?用户质疑:为何没见催缴过? 2019-02-21
  • 紫光阁中共中央国家机关工作委员会 2019-02-20
  • 南瓜这样吃最营养 这10种食物坚决不能搭配 2019-02-20
  • 蔡榆的专栏作者中国国家地理网 2019-02-20
  • 主持人资料库——胡紫微 2019-02-20
  • 男子谎称哥哥当师长能帮上军校 骗13万余元被抓 2019-02-19
  • 40年来的改革开放取得了伟大的成就,我们应该看到,以增强我们的自信;但这40年来,我国也出现了十分严重的社会问题,我们也必须看到,有些问题是40年前未曾有过并已 2019-02-19
  • 从榜单看黑茶“热” 首批中国黑茶类制茶大师公布 2019-02-19
  • 190| 223| 537| 199| 287| 197| 857| 660| 25| 714|