Gain or Loss From Options

Report on Form 8949 gain or loss from the closing or expiration of an option that isn’t a section 1256 contract but is a capital asset in your hands. If an option you purchased expired, enter the expiration date in column (c) and enter “EXPIRED” in column (d). If an option that was granted (written) expired, enter the expiration date in column (b) and enter “EXPIRED” in column (e). Fill in the other columns according to their instructions. See Pub. 550 for details.

If a call option you sold after 2013 was exercised, the option premium you received will be reflected in the proceeds shown in box 1d of Form 1099-B, box 1f of Form 1099-DA (or substitute statement) you received. If you sold the call option before 2014, the option premium you received may not be reflected on Form 1099-B or Form 1099-DA. If it isn’t, enter the premium as a positive number in column (g) of Form 8949. Enter “E” in column (f).

Example.

For $10 in 2013, you sold Joe an option to buy one share of XYZ stock for $80. Joe later exercised the option. The Form 1099-B or Form 1099-DA you get shows the proceeds to be $80. Enter $80 in column (d) of Form 8949. Enter “E” in column (f) and $10 in column (g). Complete the other columns according to the instructions.