DavidD66
Expert Alumni

Get your taxes done using TurboTax

When you sell a covered call option, it only affects the underlying stock basis if the option is exercised and the underlying stock is called away (i.e. you sell the stock).  In that case, your basis in the stock is reduced by the amount of the option premium.  If your call option expires worthless, then you have a reaalized short term gain for the amount of the premium.  There is no basis adjustment to the underlying stock.  

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