Option Sales

[Bill N Debbie]

Haven't seen this before...

On the last page of client's H&R Block Financial Advisors 1099s packet...

It shows "non-federally reported activity" Option Sales and lists some 20 or so transactions Options Sales, doesn't say "put" or "call".

On the 1099B for 2 of the equity sales, it has a note that says "redemption for cash at maturity or sale of Structured Financial Product implies the sum of options sales proceeds over the holding period for this security is taxable as a short term gain."

Do I show the Option sales as a separate transaction(s)?, every month client held the security? Do I add the option sales amount to the proceeds? What about the other option sales for the securities that client hasn't sold yet?

It also says this activity may or may not be taxable at the state or local level?

Thanks for the help!

Bill

[RoyDaleOne]

Nontaxable in Florida. LOL

I used MS Money and enter the buys and the sells works great.

[Bill N Debbie]

Nontaxable in Florida. LOL

I used MS Money and enter the buys and the sells works great.

Is that supposed to be some kind of a joke?

[JRS]

I have a few clients who use options, but their 1099 breakdown always show, even though not reported, options as Puts and/or Calls. If the put or call is exercised, I adjust the basis acccordingly, etc. If the option is not exercised then I entered it like a stock transaction. One client's 1099B actually adjusts the basis for the option. But what you are describing sounds like you need to talk to the broker or rep to figure out the 1099. The scary thing is putting "Structured Financial Product" into Google and seeing what comes up. Sorry, I could really help.