Selling Options without purchased

Forum|Forum|7 months ago
October 10, 2025
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I sold options which expired but did not purchase them. Why cant I click expired and still show my proceeds? It takes away my proceeds and only leaves cost basis option.

baldietax

Level 12

unfortunately they over-designed this with all these drop-downs without understanding about selling options not just buying them.

input them as "one by one" but ignore the 'expired' option and just say it was 'sold'; date acquired is the expiration date; date sold is when you opened the short; proceeds is the premium and cost basis zero; that should give you the correct gain/loss - check outcome on Form 8949.

you may get a question afterwards complaining about the zero cost basis, just say you don't want to adjust it, and check the entry isn't flagged as needing review.

fanfare

Level 15

"If you enter into a closing transaction by paying an amount equal to the value of the put or call at the time of the payment, the difference between the amount you pay and the amount you receive for the put or call is a short-term capital gain or loss." -- IRS

Reporting:

In order to close a short you must go to the market and acquire some securities, in this case, some options.

The acquired date is the date you closed the short sale.
The disposed date is one business days later (settlement).

Note to those for whom it is not obvious: Date Acquired and Date Disposed refer to Columns (b) and (c) on Form 8949 that you will report to the IRS.
Your trade date is the date you closed the position and goes in (b). Settlement date must be calculated taking into account weekends and market holidays.

"If an option that was granted (written) expired, enter the expiration date in column (b) and enter “Expired” in column (e)." -- IRS.

I found that TurboTax did not support this and probably still doesn't.

From this you can see that a short is always a short term capital gain or loss, no matter how long you are short.

You don't have to detail any Box A transactions without adjustments that are aggregated on Schedule D LIne 1a.