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Options and LTCG

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    Options and LTCG

    My client exercised a call option on some stock and wants to hold them for long-term gain. Does the holding period start at the time he purchased the Call or does it start when he exercised them and owns the stocks?
    "A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain

    #2
    Originally posted by taxmandan View Post
    My client exercised a call option on some stock and wants to hold them for long-term gain. Does the holding period start at the time he purchased the Call or does it start when he exercised them and owns the stocks?
    See TTB page 6-10.

    Not sure so I found this:


    "For example, say you spend $1,000 on a July 15, 2008, call option to buy 300 shares of XYZ Corp. at $15 per share. On July 1 of 2008, it's selling for a robust $35, so you exercise. Add the $1,000 option cost to the $4,500 spent on the shares (300 times $15). Your basis in the stock is $5,500, and your holding period begins on July 2, the day after you acquire the shares."
    JG

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