@MLP_Banana Again, look at Pub 550. There's a whole section on calculating gain or loss. I think the flaw in your reasoning is thinking about your contract as going from being worth $3, to being worth $0: "losing a $3 asset". That's not actually what happens: you're getting a unit of the MLP for $2.50 PLUS that contract. You're exchanging it, not losing it. That's why its leaving your account (no one would just sell you the MLP for just $2.50 -- the seller is demanding both $2.50 and the contract). Since you only paid $1 for the contract, that exchange is a $2 profit.
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
