Taxation of Employee Stock Options

You have a gain if the selling price for the offsetting call exceeds your original call's purchase premium. Most such capital gains are short-term -- you’d have to own the option for more than a year to get a long-term gain. If your call expires worthlessly, you have a capital loss on the expiration date.

BUT can you further reduce the cost of the shares by including the first 3 premiums collected if the shares are sold in the same year?

Your Answer

The stock option deduction reduces the tax rate on benefits from employee stock options to the same level as the tax rate on capital gains. La déduction relative aux options d'achat d'actions réduit le taux d'imposition sur les bénéfices tirés de ces options au même niveau que le taux d'imposition des gains en capital.

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