☰
✕
Sign In

Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 2
posted Aug 5, 2020 6:41:15 AM

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?

1 2 2225
1 Best answer
Level 15
Aug 5, 2020 9:09:08 AM

@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.

2 Replies
Level 15
Aug 5, 2020 9:09:08 AM

@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.

Level 15
Sep 17, 2020 5:54:54 PM

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