The point of a year-end close is to make January a filing exercise rather than an investigation. Everything below is easier in December, while the year is still fresh and positions are still open enough to explain themselves.

This is a records lesson, not a tax lesson. What to do with the numbers is covered in the taxes track; this is about having numbers worth using.

The close, in order

1. Every position has an outcome. Run the year's trades and confirm each one is expired, closed, assigned, called away or rolled. Positions with no recorded ending are the most common gap, and they distort both realised P&L and open premium.

2. Roll chains are intact. For every chain, confirm each leg links to its parent and that no buyback is counted twice or not at all. See recording a roll.

3. Assignments have adjusted a basis. Every assignment should have produced a share lot with an effective basis, and every call-away should have captured the basis at disposal.

4. Fees for the whole year are captured. Commissions, contract fees, assignment and exercise charges. Most brokers publish an annual total, which is the fastest way to check yours.

5. Open positions are listed with their marks. What is still open, what was collected, and what it would cost to close today.

6. Realised and unrealised are separated. One figure for what the year actually produced, one for what is still at stake. See realised versus unrealised.

The positions that straddle the year

The specific thing that makes options year-end awkward: a position opened in November and closing in January belongs to two tax years in a way that a stock trade does not.

The third and fourth rows are where confusion lives. An assignment does not realise the premium as income — it moves into the share basis, and the gain is realised when the shares are eventually sold, potentially in a different year. A roll realises the closed leg immediately while the replacement carries into the new year.

What a proper close gives you

A realised figure that reconciles. When the 1099-B arrives you are checking agreement rather than building a number from scratch — and where it disagrees, you can find out why. See reconciling a 1099-B.

An honest annual performance number. Realised P&L, fees, and the unrealised position on any assigned shares — the three components that make a wheel's real result visible.

A clean opening balance. Next year starts from a known position list with known bases, rather than inheriting whatever ambiguity was left behind.

What carries into next year

Three things, and all three are easy to lose:

• Open positions with their original credits and dates — not re-entered as new trades in January.
• Share lots with their effective bases and acquisition dates intact.
• Live roll chains that span the boundary, with their parent links.

People who rebuild their tracker each January lose all three, which is why their multi-year history never becomes useful.

What can go wrong

Starting in February. The year is cold and every ambiguity costs an hour.

Treating assignment premium as realised income. It adjusts basis; the gain comes later.

Re-entering open positions as new trades in January. Destroys duration, chains and basis in one move.

Skipping the fee total. The easiest number to obtain and the most commonly omitted.