call the broker to find out what they do. why should we speculate? However, I agree with your logic.
if i were to make bookkeeping (journal) entries for what occurred here's what I would show. Am I sure this is what the tax laws would say is your basis in the MLP - Nope. Just trying to be logical which can't always be said for the tax laws.
| |
|
DR |
CR |
| CASH |
|
|
1.00 |
| CALL OPTION |
|
1.00 |
|
| |
PURCHASE |
|
|
| CASH |
|
|
2.50 |
| BASIS MLP |
|
2.50 |
|
| |
EXERCISE |
|
|
| BASIS MLP |
|
2.50 |
|
| CALL OPTION |
|
|
1.00 |
| 1256 GAIN |
|
|
1.50 |
| |
ENTRY TO RECORD GAIN
|
|
|
| |
|
|
|
| |
|
|
|
| SUMMARY |
|
|
|
| CASH |
|
|
3.50 |
| BASIS MLP |
|
5.00 |
|
| 1256 GAIN |
|
|
1.50 |
