Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
Qualified covered calls
Posted by: Stephen Mann, April 26, 2017 12:42AM
My understanding is that one of the requirements necessary for a call to be a qualified covered call is that it not be part of a larger straddle. Rev. Rul. 2002-66 has concluded that a stock, long put and short call (a collar) are all one straddle, and the call should not be treated as a qualified covered call.

What about a qualified covered call and an additional short OTM call? (long stock short 2 OTM calls, one "naked")

Would this position be a tax straddle? How about a constructive sale?



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