• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 2. Option Basics > Tax Rules for Options: An Overview

Tax Rules for Options: An Overview

Tax rules for options are, for the most part, the same for options as for other investment activity. Dividend income is taxed at the top rate of 15 percent from years 2003 and forward. Capital gains are either long-term or short-term, and the tax rates for long-term gains are lower, also at 15 percent.

Some very important exceptions apply to taxes on option trades. The most complex relate to writing in-the-money calls. These rules are explained in detail in Chapter 5. Otherwise, the following tax rules apply:


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint