Options Taxation and Calculations: Rapid Fire

What this video covers

• Why "calls add, puts subtract" gives the breakeven for any call or put, long or short, and why the buyer and writer share identical breakevens
• How to calculate max gain and max loss on naked options, spreads, straddles, and combinations, including why short put loss is capped at strike minus premium, not unlimited
• The debit spread and credit spread quick-check rule: max gain plus max loss always equals strike difference
• What happens taxwise at expiration versus exercise: capital loss or gain on expiration, zero option gain or loss on exercise, with premium folding into stock cost basis or sale proceeds
• Why writers of options are always short-term for tax purposes, even on Long-term Equity AnticiPation Securities (LEAPS) held for years, and why only the LEAPS buyer clears the 12-month long-term threshold
• Which contracts qualify for Section 1256 mark-to-market treatment, the 60/40 long-term/short-term blended rate, the December 31 deemed sale, and the three-year loss carryback that regular capital losses do not get
• How the wash sale 61-day window applies to options as substantially identical securities, and when the married put exception protects versus destroys the stock holding period