Finra Exam Series-7 Topic 3 Question 24 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 24
Topic #: 3

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.

If Bubba sells the stock at $45 in July, what is his resulting tax liability for that transaction?

Ano liability established until the offsetting option position is closed

Ba $400 gain

Ca $1,000 gain

Da $400 capital loss

Show Suggested Answer

Suggested Answer: C

a $1,000 gain. There is a $1,000 gain on the stock. The option is a separate capital asset.

by Cheryl at May 08, 2022, 03:32 PM

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