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Technology Stocks : Intel Corporation (INTC)
INTC 50.59+4.9%Feb 6 9:30 AM EST
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To: Sadim Gnik who wrote (6343)12/12/1996 5:55:00 PM
From: Bernard Newman   of 186894
 
For tax purposes, there is no such thing as a "net position". In your example, the only taxable event that occurred was that you sold short at $141 and closed the short at $137...for a 4 point or $400 dollar short term taxable gain. The fact that you had 100 long shares had nothing to do with "today's" taxable event. In reality, however, your $400 profit cancelled out the $400 loss that your long shares experienced by going down from $141 to $137. Similar to selling at $141 and locking in your profit, but you continue to defer the big cap gain on those long shares. If you got really good at it, you could continue to trade on the short side while holding the long shares and deferring the cap gain indefinitely.

*BERNIE*
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