Solved: How is Put option premium taxed?
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nomad_dt
Level 2

How is Put option premium taxed?

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?

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Accepted Solutions
tagteam
Level 15

How is Put option premium taxed?


@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

2 Replies
tagteam
Level 15

How is Put option premium taxed?


@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
Level 15

How is Put option premium taxed?

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

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