topic I have open short stock option positions in open market with expiration dates of next year. How will the amount I received by short selling be taxed for this year? in Get your taxes done using TurboTax

I have open short stock option positions in open market with expiration dates of next year. How will the amount I received by short selling be taxed for this year?

vikrant-kothari — Tue, 24 Feb 2026 08:29:28 GMT

How will the tax be determined when I close the position next year? It is a Short Put Option for a stock that I also hold.

Re: I have open short stock option positions in open market with expiration dates of next year. How will the amount I received by short selling be taxed for this year?

Mike9241 — Mon, 04 Dec 2023 16:46:34 GMT

reporting of the short sale of the put for tax purposes is in the year the position expires or you purchase to close. a short sale expiring or purchased to close is short-term capital gain/loss. if the put is exercised it reduces the cost basis of the stock acquired. There is no tax reporting until the underlying stock is sold.

this assumes you are not a trader who made the mark-to-mark election.

Re: I have open short stock option positions in open market with expiration dates of next year. How will the amount I received by short selling be taxed for this year?

fanfare — Mon, 04 Dec 2023 17:23:51 GMT

While you have an open position nothing appears on your tax return unless it has triggered a wash sale of the same security.

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.
For Stocks, the disposed date is two business days later (settlement).
Options settle in one day.

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

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

@vikrant-kothari

Re: I have open short stock option positions in open market with expiration dates of next year. How will the amount I received by short selling be taxed for this year?

vikrant-kothari — Mon, 04 Dec 2023 17:54:26 GMT

Thank you. So the money I received by selling put options short is not taxable until I buy the put options to close the short position or the short position expires or the short position is fully executed?

Re: I have open short stock option positions in open market with expiration dates of next year. How will the amount I received by short selling be taxed for this year?

fanfare — Mon, 04 Dec 2023 21:08:12 GMT

see recent wall st. journal article: Supreme Court to decide whether congress can tax your income before you realize it.