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A. local option set
B. single line of text
D. global option set
NEW QUESTION: 2
In mid-September, Bubba sells one XYZ February 50 call at $6. It subsequently expires without being
exercised. How is the premium taxed?
A. the $600 premium constitutes ordinary income
B. the $600 premium is rolled over into another XYZ call with the next longest expiration date.
C. the $600 premium is a capital gain
D. Bubba's cost of the underlying stock is reduced
the $600 premium is capital gain. That's simply how the tax law works.
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