Reporting Covered Call Straddle Wash Sale

[DaveW]

What is the name of your state? NC

What is the correct reporting for the following situation?

Covered calls were written in 2006 against stock held with a short-term holding period. The calls were not qualified because they were written less than 30 days before expiration, so the position is a straddle and was identified as such in the holder's records. The position was later closed by repurchasing the calls at a loss. Three days later, an equal number of calls were written (with a later expiration date) against the same stock, so the first position is a wash sale.

Is this treated as a wash sale of stock would be (loss added to the basis of the subsequent position) or does the fact that it's an identified straddle mean that the loss is added to the basis of the offsetting stock? How is this reported (Schedule D only as is done for stock or is Form 6781 required)? If Form 6781 is required, which sections should be filled in and how is the transaction flagged as a wash sale?