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Old 01-16-2011, 08:59 PM
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Join Date: Jan 2011
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Do I have to report exercised options ?

Hello,
This year is the first time I exercised an option and it seems that there are special rules for that but they are not explained in too much detail
According to the IRS rules when I exercise a call option let's say, I would add the cost to the basis of the stock which is fine but what happens to the option trade ?
Do I just ignore it and not report it anywhere ?
How does the IRS know where this higher amount that I paid for for the stock is coming from ?



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