recording option to stock conversion.

Sep 06, 2006 2 Replies
J

I bought some calls which I let expire so as to have the stock delivered to me. I can not figure out a "Quicken assisted" method to close out the option position and roll the cost of the option into the basis of the stock delivered to me. Can Quicken handle this? As I understand it tax-wise, Since I took possession of the stock I do not have to report any gain/loss (in my case a gain) until I sell the stock and the holding period for the stock starts on the day of delivery of the stock (not when I took the position in the option).



If I do it "manually" I can sell the option for what it cost me and then buy the stock at strike price + commission + option cost + option commission. It is "tax accurate" and not too hard to implement but doesn't really capture the transaction "flow"....



any help apprecaited!



Thanks, Jim



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S

This is unclear. Did you exercise the option and buy X shares for $Y? Or, did you (as you said) let the option expire and not get any stock?

I haven't traded options in decades, but I always thought of the option as a completely separate security from the stock it's tied to. Each is bought for a price and sold for a profit or loss.

Jim_the_geek wrote:

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J

Stubby:

Sorry. I bought a call option which was in-the-money at expiration and so I let stock be delivered.

I bought $35 call option on BHP and on day of expiration the stock was selling for $42 so I had the shares delivered to me for which I paid $35/share.

So for tax purposes (and to keep Quicken from posting things I don't want posted to my capital gains report) I think I can do what I said below, but was wondering if Quicken offered a more elegant solution ;-)

Thanks, Jim

Stubby wrote:

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