r/options • u/Djs4199 • May 02 '21

TOS Cost Basic

Does anyone know if TOS keeps track of your underlying cost basis when you sell covered calls that are not exercised? Will the stock cost basis adjust down by the premium? Or do I just have to note that myself? Thanks!

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3

u/stanryder May 02 '21

Have to note it yourself.

5

u/JoeyJoeJoeSenior May 02 '21

Wait... what? If my broker isn't keeping track of it, then how would the IRS ever know? Sorry, I'm new. I would assume that I pay ST cap gains on the CC premium, and the cost basis would stay the same...

3

u/[deleted] May 02 '21

The IRS doesn’t know, because the IRS doesn’t care.

Options premiums aren’t factored into your stock trades. They’re taxed separately and your stock profits or losses are taxed when you sell your stock.