Dow does the IRS tax options sales on stocks?

Question

does the IRS tax short term options sales the same way they tax short term stock sales? Is it still at that capital gains rate?

Answer 1

Short term (under 1 year) sales of options or stocks are taxed at your normal income tax rate.

Answer 2

If you are talking about something like you pay a fee for the right to purchase stock at a certain price in the future then this is a short term gain you report on schedule D

If you are talking about exercising stock options your employer granted to you then these are wages and will be on your w-2 report them on line 7 of your 1040. I don’t remember if these kind of options are subject to social security taxes or not but they probably are. You can claim expenses of the sale on Schedule D by using the expense as your basis and 0 as the sale price.