Stock Option Calls And Puts losses

by Tax Guy - Burlington Accountant on December 31, 2009 Print This Post Print This Post

Reader Question:

Last year, I put a lot of money in buying option calls and option puts. Some of these I sold at a profit. Most of them expired worthless. So, in the end my net loss was over $10,000. Should I have got some tax form from my bank regarding this loss that I can then claim against any capital gains in future years?

The treatment of your options trading for tax purposes is dependent on your classification as either an investor or trader. If your investments normally result in capital gains or losses then your gains or losses on the disposition of options are on account of capital and gains or losses would be capital gains or losses.

Your investment dealer must provide you information about dividends and interest paid to you from holding securities and must also provide you with confirmations of your acquisitions and dispositions (other than expiry). Other than that, you are required to report your own capital gains or losses.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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Wendell March 25, 2012 at 1:21 am

Dear Sir,

In Year 2011 I sold my stock options and made some profit (reported in T4); but at the same year I had some capital loss of other stocks. Can I appy for the capital loss to the stock options gain? Which form I should use?

Thank you very much,

Tax Guy March 25, 2012 at 6:38 pm

Wendell, if the options sales were capital, then it does not matter whether they were stocks or options to use the offsetting losses. I can also tell you that the tax rules around stock options is highly complex and it is very easy to run into trouble. If you’d like to discuss how I can help, you can contact at this page.

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