Guide

Cost basis after a cash-secured put is assigned

One lot through one wheel cycle, every number shown. The tax view and the wheeler's view disagree on every line and agree on the total. If they don't, a leg is missing.

Updated 13 Oct 2026

Made-up numbers. KO is used because it's a familiar ticker; the prices are invented to keep the arithmetic clean, and commissions are left out. This is bookkeeping, not tax advice. Check your own figures with your CPA; the reference is IRS Publication 550.

The cycle

When	What happened	Per share
October	Sold 1 KO 60 put, 38 days out	+1.20
November	Assigned at expiration: bought 100 KO at 60.00	−60.00
November	Sold 1 KO 62.5 call; it expired worthless	+0.90
December	Sold 1 KO 62.5 call	+1.10
December	KO ran. Bought that call back	−1.50
December	Sold 1 KO 65 call, January expiration (the second leg of the roll)	+2.20
January	Called away: sold 100 KO at 65.00	+65.00

The tax view

In general terms, before your CPA's adjustments:

Stock basis: the assigned put's premium reduces it. 60.00 − 1.20 = 58.80 per share.
Stock proceeds: the assigned call's premium is added to them. 65.00 + 2.20 = 67.20 per share.
Gain on the shares: 67.20 − 58.80 = 8.40 per share.
The November call expired worthless. Its 0.90 is a separate gain, in the year it expired.
The December call was bought back: 1.10 received, 1.50 paid, a separate loss of 0.40.
Total: 8.40 + 0.90 − 0.40 = 8.90 per share, $890 on the lot.

Holding period, wash-sale rules on the buy-back and the qualified-covered-call rules are all real and all left out here. Those are the things to put in front of your CPA.

The wheeler's view: effective basis

Strike minus every net premium collected on the lot, updated as each leg closes:

After	Arithmetic	Effective basis
Assignment	60.00 − 1.20	58.80
November call expires	58.80 − 0.90	57.90
December call sold	57.90 − 1.10	56.80
December call bought back	56.80 + 1.50	58.30
65 call sold	58.30 − 2.20	56.10
Called away at 65.00	65.00 − 56.10	8.90 gain

Same 8.90. The two views label the pieces differently and land in the same place. When they don't, it is nearly always a missing buy-back.

Where the effective basis earns its keep

In December, with KO above 62.5 and the call going against you, the question was whether 65 was a safe strike to roll to. The effective basis said 56.80 before the roll, so any strike above that locks in a gain on the shares if assigned. The broker's screen said the position cost 60.00, or 58.80 if your broker adjusts for the put. Both of those are true. Neither one answers the question.

What your broker will show

It varies. Some brokers reduce the displayed basis by the assigned put's premium, some show the bare strike and leave the adjustment to the tax forms, and a few do one thing on screen and another on the 1099-B. Read your own broker's statement once after your first assignment so you know which it is. Then keep your own record anyway.