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In June, Bubba bought 100 shares of XYZ at $35.

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In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600. In April, Bubba exercises the put option and uses his stock for delivery.

What is his resulting tax consequence?

A.

a $600 capital loss

B.

neither profit nor loss

C.

cannot be determined without knowing the market price of XYZ upon exercise

D.

this is a wash sale and cannot be included in the investor’s tax calculations

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