In Early 2015,Wanda Paid $33,000 for an Option on a Parcel

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The Answer is If an option holder (grantee)fails to exercise the option,the lapse of the option is considered a sale or exchange on the option expiration date.Thus,the loss is a capital loss if the property subject to the option is (or would be)a capital asset in the hands of the grantee.Wanda has no gain or loss in 2015 because the option had not yet expired.Wanda has a $33,000 long-term capital loss in 2016 when the option expires because the land would have been a capital asset if Wanda had exercised the option.

In Early 2015,Wanda Paid $33,000 for an Option on a Parcel

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In Early 2015,Wanda Paid $33,000 for an Option on a Parcel

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