Suppose that I sold a call option at $1/share on XYZ at a strike of $100.
The holder of the call exercised the option when the market price of XYZ is $110.
Now I need to buy 100 shares at $110 and sell them for $100.
So I made $100 of premium from writing the call but I lost $1000 from the shares.
Would the IRS count this as a $900 loss towards my short term capital gains