Short Sales and Options Tax Rules

What this video covers

• Why a same-day married put preserves the stock's holding period, and what happens to the put premium if it expires unexercised versus if it is exercised
• How a put bought later on short-term stock triggers the short-sale rule and completely eliminates, not pauses, the prior holding period
• When the new holding period clock starts fresh after a later put on short-term stock: on put close, exercise, expiration, or stock disposition
• Why stock held more than 12 months is unaffected by a later put, and the exact wording the exam uses to test this distinction
• The calculation impact of a lapsed married put premium being added to stock cost basis, and an exercised married put premium reducing sale proceeds
• How to distinguish the married put exception from the short-sale rule destruction when given a timeline of purchase dates
• The policy reason behind these rules: preventing investors from locking in gains with downside protection while waiting for long-term capital gains rates