Options Tax Treatment – Derivatives at IBKR

Options are one of the most popular instruments at Interactive Brokers – from covered calls to cash-secured puts to complex spreads. But tax-wise, options are surprisingly tricky: they are classified as derivative transactions, fall into a separate loss offsetting pot, and follow different rules than stocks. This article explains how the German tax authority treats options and what you need to watch out for.

Options Are Derivative Transactions

From a tax perspective, options are not securities but derivative transactions (Termingeschäfte) under § 20 Abs. 2 Satz 1 Nr. 3 EStG. This applies to all option types at IBKR – whether OPT, FOP, or FSFOP, put or call, long or short.

The classification as a derivative transaction has far-reaching consequences: option gains and losses are treated separately from stock transactions and were subject to special loss offsetting restrictions until 2024.

Tax Scenarios at a Glance

Different outcomes of an options trade lead to different tax consequences:

Short Open – Collecting a Premium

You sell an option (short put or covered call) and receive a premium. This premium is immediately taxable as income from a derivative transaction (§ 20 Abs. 1 Nr. 11 EStG).

Tax treatment: Immediate income, no deferral until expiry.

Long Close / Short Close – Buyback or Sale

You close an existing position with an offsetting trade. The gain or loss is the difference between the opening and closing premiums.

Tax treatment: Gain or loss from derivative transaction (§ 20 Abs. 2 Nr. 3 EStG).

Expiry (Long) – The Option Expires Worthless

Your purchased option expires worthless. The paid premium becomes a loss. Important: Even a worthless expiry is a taxable event – the loss must be declared.

Tax treatment: Loss from derivative transaction. Falls into the derivative loss pot.

Expiry (Short) – You Keep the Premium

Your sold option expires worthless – you keep the premium received at short open in full. Since the premium was already taxable when received, no additional taxable event arises at expiry.

Tax treatment: No new event at expiry, as the premium was already taxed when received.

Exercise / Assignment

When an option is exercised, no direct gain or loss from the derivative transaction arises. Instead, the option premium is incorporated into the acquisition costs or proceeds of the resulting stock position.

Tax treatment: No immediate taxation – the premium becomes part of the stock transaction.

What Many Don't Know

💡 A worthless option expiry is a taxable event – the loss must be reported on your tax return.

💡 Writer premiums (short put / covered call) are taxable immediately upon receipt – not only upon expiry or buyback.

💡 When an option is exercised, no option tax applies – the premium is folded into the stock position and only becomes tax-relevant when the stock is sold.

💡 Option losses cannot be offset against stock gains, dividends, or ETF returns – they go into the separate derivative loss pot.

The Derivative Loss Pot

Losses from options trades cannot simply be offset against any capital income. They go into the derivative loss pot (§ 20 Abs. 6 Satz 5 EStG old version) and can only be offset against gains from other derivative transactions – e.g., futures, CFDs, or other options.

From 2021 to 2024, there was also a €20,000 annual loss offsetting cap. However, this cap was retroactively abolished by the Annual Tax Act 2024 (see below).

Removal of the €20,000 Cap (JStG 2024)

With the Annual Tax Act 2024, the legislature retroactively abolished the loss offsetting restriction for derivative transactions. The controversial €20,000 cap, in effect since 2021, was repealed.

The €20,000 cap is thus retroactively repealed for all affected years. From the 2025 tax year onwards, derivative transactions flow into the general loss pot (KAP-22). For the years 2021–2024, however, the Anlage KAP tax forms still have separate lines for derivative transactions (KAP-21 for gains, KAP-24 for losses). BubbleTax automatically detects the tax year and assigns amounts to the correct form lines.

IBKR Users: What BubbleTax Calculates for You

Interactive Brokers provides detailed data on options trades but does not classify them according to German tax law. BubbleTax handles this automatically:

Automatic classification of all option trades as derivative transactions (OPT, FOP, FSFOP)
Correct calculation of gains and losses for expiry, buyback, exercise, and closeout – including EUR conversion at the ECB rate
Assignment to the correct Anlage KAP form lines – for 2021–2024 separate lines KAP-21 (gains) and KAP-24 (losses), from 2025 in the general pot KAP-22

Legal Classification

Options fall under § 20 Abs. 2 Satz 1 Nr. 3 EStG (derivative transactions), writer premiums under § 20 Abs. 1 Nr. 11 EStG. Loss offsetting follows § 20 Abs. 6 EStG. The former €20,000 loss offsetting cap (Satz 5 old version) was retroactively abolished by JStG 2024. From 2025, derivative transactions flow into the general pot (KAP-22). For 2021–2024, the forms still have separate lines (KAP-21/KAP-24). BubbleTax automatically assigns amounts to the correct form lines.

Options & Taxes