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Options Question
Are option losses a deductable expense?
Say my portfolio generally follows the SP-500. I buy puts (SPY) as insurance to cover the full value of my portfolio of $100,000. The options to cover this amount cost me $3,740. The market flattens out and the options eventually expire worthless. Is that $3,740 loss tax deductable?
Best Answer
989 points
rvilmur answered 6 months ago …
Yes, you can offset capital gains with this capital loss which will generally be short term with options. If you have no gains to offset at the end of the year, there is a maximum of $3000 that can be deducted from your AGI and the $740 extra loss will have to be carried over to the next tax year.
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