I sell a put with an expiration of 18 months from now. It is 18 months later and the put is well out of the money. I can let it expire worthless or I can buy the short Put back for one penny. My brokerage company claims that either action will still result in a short term (ordinary income) gain. I have read several articles (including in this forum) that it is a long term gain. The great many trades at a penny a day or two before expiration seems to indicate that by doing so it becomes a long term gain.

What is the answer?

there is an info tha t syas long-term equity anticipation security is a call or put option allowing the buyer a long-term expiration on the option to buy or sell shares of stock at a set price, called the strike price. Expiration dates on LEAPs can range from9 months to 3 years, making them a more long-term holding than a traditional call / put option

Thank you for your comment. I agree with your definition of a LEAP, and have no disagreement with anything in your remarks. However, I don't believe you answered the question I posed, which is what is the tax treatment of a short put held over 12 months.

For a put, when you sell it at the LEAP's strike price and subsequently makes a profit , you need to pay capital gains tax based on the amount of TIME you owned it, without regard to the length of time you held the contract.