How do I report transactions related to stock options?
The reporting requirements depend on whether the purchase or sale relates to the option itself or the underlying stock. If you purchase or sell a stock option, report the transaction on Schedule B, Part I if the amount of the transaction is over $1,000.
However, the exercise of a stock option is not considered a sale or purchase of the option. For an option that gives you a right to buy a security, you will have a reportable purchase of the underlying security if you exercise the option. For an option that gives you the right to sell a security, you will have a reportable sale of the underlying security if you exercise the option.
For transactions related to options or the underlying security, you should identify the following information on Schedule B, part I: name of the option or underlying security; type of transaction; date of transaction; and category of amount of the transaction.
I buy shares of a mutual fund every month. Do I have to list each one of these purchases as a separate line item on Schedule B, Part I?
When you buy shares of a stock or a mutual fund on an established schedule throughout the year (e.g. the first of every month), you still have to list the stock or mutual fund as a purchase on Schedule B, Part I. But in this situation, you do not have to list each date of purchase. Instead, you may aggregate the total amount of your purchases and make a notation that the shares were purchased throughout the year on the first of the month. Of course, if any of these periodic purchases is less than $1,000, even though the aggregate for the year may be greater than $1,000, that particular purchase does not need to be included in the amount aggregated.