Anyone knows IRC section 1092 straddle ? For protective puts

Just found out today that if I hold

1) QQQ positions

2)  protective QQQ put options 

 

Closing QQQ puts at loss will trigger IRS code 1092 straddle. Basically if I have unrealized gains on QQQ, then I can NOT report the realized loss on the puts. Instead, the loss on the put will be added back as the cost basis of qqq

 

do I understand this correctly? And in reality, does IRS  really follow it up? I don't think my brokers will label them as section 1092 transactions 

 

所有跟帖： 

• i think it's about right, but -abc-nezha- ♂ (244 bytes) () 12/02/2025 postreply 07:38:09

• Thank you. But deep ITM covered calls still could trigger it -QQQ2074- ♂ (265 bytes) () 12/02/2025 postreply 08:57:35

• same as other tax liabilities -abc-nezha- ♂ (36 bytes) () 12/02/2025 postreply 10:35:16