A taxpayer reported the following information in years 20x1 and 20x2:

• 6/15/x1: buy a put option on 50 shs of BIG Corp for $1,500
• 12/1/x1: buy a call option on 50 shs of BIG Corp for $1,250
• 12/15/x1: sell the put option for $1,300
• 12/31/x1: the call option has a fair market value of $1,275
• 6/30/x2: sell the call option for $1,400

What is the amount and character of taxable income/loss recognized in 20x1?

	a.	$200 short-term capital loss
	b.	$225 short -term capital loss
	c.	$175 short-term capital loss
	d.	$175 short-term capital loss and $25 short-term capital gain

Answer rating: 100% (QA)

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