Please see our Option Exercises and Stock Assignments tax topic for a detailed explanation of the IRS rules for options that get exercised.
Also please see our blog article entitled: "Selling Puts Creates a Potential Tax Prep Nightmare"
To adjust for exercised options and assignments:
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Use the Find Ticker command to find all of your stock and option trades for a particular stock. Use the * wildcard character to find both stocks and options which start with the same stock ticker symbol. (i.e.: DELL* will find both DELL stock trades as well as DELL option trades.)
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Select the option transaction as well as the corresponding assigned stock transaction with your mouse. Holding the CTRL key on your keyboard while left-clicking with your mouse allows you to select non-contiguous transactions.
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Select Exercise / Assign from the dropdown TradeLog Edit menu, or click Ctrl + E for the shortcut.
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You will be prompted if you want to Exercise the selected option transactions and change the cost basis of the stock transactions, Is this what you want to do? - click Yes.
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You will next be prompted to save your records, click Yes to continue.
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The TradeLog Matched Lots column will display "Ex-N" where N is the Exercise/Assignment number. This number starts with 1 and increments each time you exercise an option.
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Repeat the above steps for each exercised option / stock assignment combination.
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You can easily find all of your exercised and assigned positions by using menu item: Find, Exercises / Assigns.
