FINRA Series 7 General Securities Representative Qualification Examination (GS) Series-7 Question # 67 Topic 7 Discussion

FINRA Series 7 General Securities Representative Qualification Examination (GS) Series-7 Question # 67 Topic 7 Discussion

Series-7 Exam Topic 7 Question 67 Discussion:
Question #: 67
Topic #: 7

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?


A.

no liability established until the offsetting option position is closed


B.

a $400 gain


C.

a $1,000 gain


D.

a $400 capital loss


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