Dan owns 500 shares of Rocket Corporation common stock. The stock was acquired two years ago for $30 per share. On October 2, 2022, Dan writes five calls on the stock, which represent options to buy the 500 shares of Rocket at $75 per share. For each call, Dan receives $210. The calls expire on June 22, 2023. Consider the following transactions and describe the tax treatment for Dan:
a. The five calls are exercised on December 4, 2022.
b. The calls are not exercised and allowed to expire.