The federal tax rules concerning options are among the most complex sections of the tax code. This has led to many misunderstandings. For example, many traders have heard that some covered calls are "unqualified." What does this mean?
It means that in some situations, a trader who has opened such a position will not be able to report gains as long-term gains if and when the call is exercised and the underlying called away. This applies only if you have held the underlying for less than one year w