Mar 21st, 2022 9:57 am
Mar 21st, 2022 10:21 am
Mar 21st, 2022 10:53 am
performance wrote: ↑ normally they are capital gains unless you trade the fk out of them then their income.
Mar 21st, 2022 2:06 pm
Mar 23rd, 2022 11:24 am
Mar 23rd, 2022 11:26 am
Mar 23rd, 2022 11:31 am
Mar 23rd, 2022 5:10 pm
Thank you for the detailed reply -- exactly what I was looking forretireyoung55 wrote: ↑ If you are doing covered calls (meaning you own the underlying shares) then the call premium that you receive gets worked into your adjusted cost base of your shares and eventually when you sell the underlying shares the call premium will be incorporated into the overall gain or loss. For example:
Suppose you buy 100 shares of BCE @ 59.00= $5,900.00 (outflow)
Sell 1 call contract @ $1.20= -120.00 (inflow)
Your Adjusted cost base of the 100 BCE shares is now $5780.00
You then turn around a few months later and sell the BCE shares for $63.00
Proceeds of Disposition= $6300.00
Adjusted Cost Base= $5780.00
Capital Gain= $520.00 and you'll pay taxes on half of that so you're paying taxes on $260.00
Mar 24th, 2022 2:32 pm
I suggest that you read the information on the following website:
Apr 6th, 2022 10:49 pm
I just want to clarify, if you don't sell the shares during the tax year and the covered call expires worthless, you do not need to report a capital gain for the year? It is only part of the ACB until you sell your shares?retireyoung55 wrote: ↑ If you are doing covered calls (meaning you own the underlying shares) then the call premium that you receive gets worked into your adjusted cost base of your shares and eventually when you sell the underlying shares the call premium will be incorporated into the overall gain or loss. For example:
Suppose you buy 100 shares of BCE @ 59.00= $5,900.00 (outflow)
Sell 1 call contract @ $1.20= -120.00 (inflow)
Your Adjusted cost base of the 100 BCE shares is now $5780.00
You then turn around a few months later and sell the BCE shares for $63.00
Proceeds of Disposition= $6300.00
Adjusted Cost Base= $5780.00
Capital Gain= $520.00 and you'll pay taxes on half of that so you're paying taxes on $260.00
Apr 7th, 2022 8:21 am
Vincenting -- thank you for your detailed explanation with example. IN other words call premium is capital gain at the end of the day since it reduces ACB -- but does not have to be declared until the underlying is sold.
Apr 7th, 2022 11:26 am
That's the US tax system, and it's not the way it works here.retireyoung55 wrote: ↑ If you are doing covered calls (meaning you own the underlying shares) then the call premium that you receive gets worked into your adjusted cost base of your shares and eventually when you sell the underlying shares the call premium will be incorporated into the overall gain or loss. For example:
Suppose you buy 100 shares of BCE @ 59.00= $5,900.00 (outflow)
Sell 1 call contract @ $1.20= -120.00 (inflow)
Your Adjusted cost base of the 100 BCE shares is now $5780.00
