@DianeW777Note that this Q. is about *written* i.e. SOLD SHORT option contracts which expire worthless. That is different than buying an option but never exercising it.
The IRS instructions for 1099-B seem to me to say that it is correct for the PROCEEDS (box 1d) to be the premium received when writing (ie selling short) the option contract, and the COST is zero for expired options. Note that exchange-traded options are now "covered". Here is a quote from the 1099-B instr.:
"Closing transactions.
In the case of an option, a regulated futures contract, a securities futures contract, or a forward contract, a sale includes any closing transaction. A closing transaction is a lapse, an expiration, a settlement, an abandonment, or other termination of a position (which includes a right or an obligation under a forward contract, a regulated futures contract, a securities futures contract, or an option).
Example.
For an option that is a covered security, that also has a basis of zero in the option upon a closing transaction, enter -0- in box 1e."
