October 5, 2008
How do I report option gains or loses?
mgm00056 asked:
I traded options in 2006. I.e., I bought and sold calls and puts without owning the underlying stock. My net for the year was a loss of about $1200. Can I report this loss on my 2006 tax return? If so, where?? Thanks.
I traded options in 2006. I.e., I bought and sold calls and puts without owning the underlying stock. My net for the year was a loss of about $1200. Can I report this loss on my 2006 tax return? If so, where?? Thanks.
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Comments on How do I report option gains or loses? »
Yes you can, and should, report the loss.
Usually you just report the transactions on Schedule D, just as you sould for stock transactions. Just like stocks, you can have a wash sale. Also, if you traded any spreads with offsetting positions or traded any Section 1256 contracts you will should report them on Form 6781.
As a privite investor the only Section 1256 contracts you are likely to have traded would be cash settled options on a broad market index, such as SPX options.