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Nope, again! This is what I understand. Options purchased at the same time
as anything else that is considered a long-term gain or loss, are also
considered a long-term gain or loss. For example, if one purchases leaps, a
gain or loss is considered long term, given that it is held for more than a
year. A put purchased at the same time as a stock is also considered
long-term. However, the sale of an option is deemed short term because the
purchaser had no intention of "gaining" over the long-term. Profiting from
the short sale of a leap is short term gain.
As there are many seemingly and often definitely contradictions in respect
to short-term and long-term gains or losses, I believe it is far better to
sidestep those (tax) issues completely and run trades through an entity that
isn't taxed like corps or partnerships. In other words, one is entitled to
arrange one's affairs as it were to maximize profit or gain and minimize the
expense of taxation, and the code provides a number of avenues to do that.
Making trading decisions based on rates of taxation not only impairs
profitability, it is a little "old fashioned."
Colin West
cwest@xxxxxxxxxxxx
303-785-1702 (direct)
Nope. Options are taxed as short term cap gains (taxed at the same rate as
ordinary income). Futures still enjoy the benefit of the 60% long term -
40% short term cap gains split. The tax disadvantage of options is one
reason (of many) that I do not trade them.
MT
At 10:51 AM 7/6/01 -0400, Bob Fulks wrote:
>Index-option profits are taxed like utures, I believe.
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