Tax Treatment by Option Type - Summary

What this video covers

• Sorting any option into standard equity or 60/40 marked-to-market treatment before calculating anything else
• Why expiration and closing transactions on equity options are almost always short-term capital gains or losses
• The LEAPS exception for buyers holding more than 12 months, and why writers always get short-term treatment even on LEAPS
• How the 60/40 split applies to broad-based index, foreign currency, and yield-based options regardless of holding period
• Why exercise and assignment never trigger option-level gain or loss, and how premiums fold into cost basis or sale proceeds
• The "calls add, puts subtract" memory aid for all four exercise and assignment scenarios
• When wash sale rules apply to equity options and why 60/40 contracts are generally exempt, including the 61-day total window trap
• How a same-day married put leaves the holding period unchanged while a later put on short-term stock resets the holding period to zero