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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )
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To: Colin Cody who wrote (1918)4/7/1999 2:10:00 AM
From: Mr. Aloha  Read Replies (1) of 5810
 
I understand that the recent law changes mean "shorting against the box" can cause your long-term capital gain shares to be sold in a "constructive sale" even if you don't want them to be. However, I heard there's an exception if you cover the short in a certain time period (within 30 days from the end of the year?). Does anyone know the specifics of this?

Does this law affect options? In other words, if I sell call options and buy put options at the same strike price (synthetic short), is my long-term gain in my underlying shares in jeopardy?

I'd like to hold my shares for many more years (deferring big gains), but would like to protect against short-term weakness using options or shorting. How can I do this without worrying about Uncle Sam saying I have to realize the gain?

Thanks,

Mr. Aloha
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