SIE Exam Question 136: Answer and Explanation

Question: 136

How are gains and losses on options treated for tax purposes?

• A. They are treated as long-term gains or losses.
• B. They are treated as short-term gains or losses.
• C. They may be treated as either short-term or long-term gains or losses.
• D. Gains and losses on options are not taxable.

Correct Answer: B

Explanation:

All gains and losses on options are treated as short-term gains or losses for tax purposes.