How Do Net Capital Gains Work for Trading Options?

[turbo651]

So my wife and I, like many others, got into investing/options trading during the start of this pandemic. We both started with Robinhood accounts, but I later moved onto using TD Ameritrade/Think or Swim. My question is, for a married couple filing jointly, how do capital gains taxes work in regards to options trading on multiple accounts?

So say at the end of the year our account values look like this:

Wife Robinhood: +$10,000

My Robinhood: -$10,000

My TD Ameritrade: +$20,000

Am I correct in thinking the Robinhood account values would essentially offset in this scenario and the net short term capital gains tax we have to pay at the end of the year would be on the $20,000?

Additionally, are there any other tax considerations to consider in this scenario or in general when trading options? Also, what would be the best way to reduce tax liability in this situation?

[Anonymous]

they're treated as capital gains - and options sold short would result in short term capital gain/loss.   any options bought long and held less than a year are also short term capital gains or losses. it's possible to have wash sales on the options.    both Robinhood and TD Ameritrade would have furnished you with 1099-B's detailing the reporting.  $20,000 STCG is correct. 

Take losses before year-end and then watch the wash sale rules. you may want to look into LEAPS.   this is an income tax forum so for specific investment strategies and advice contact your investment advisor.