How is Put option premium taxed?

nomad_dt · ‎August 5, 2020

Hi!

If today I sell an uncovered Put with an expiration date of January 21, 2022 for $100, and then close out of this position on January 21, 2022 with a $100 profit, how will this profit be taxed when I file my taxes for the year 2022? As ordinary income, or as long term capital gains?

tagteam · ‎August 5, 2020

@nomad_dt wrote:

As ordinary income, or as long term capital gains?

You are an uncovered option writer, so it would be short-term capital gain.

View solution in original post

fanfare · ‎September 17, 2020

Selling short always yields a Short Term Capital Gain or Loss, no matter how long it takes you to collect.

How is Put option premium taxed?

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