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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (61394)	1/11/2000 12:03:00 AM
From: RoseCampion	Read Replies (3) \| Respond to of 152472

If you are working in a taxable acct., I would talk to an accountant before executing a DIM covered-call sale plan. If such a sale were deemed a constructive sale by the IRS, it could have tax implications. I'll go further than that. Sell a deep-in-the-money (or maybe even a just-enough-in-the-money) call against long common, and it is considered a "constructive sale" under the regs, and you will have to pay capital gains as if you'd sold the shares then and there, and you will suspend or eliminate completely any long-term holding period you've built up in owning the shares. The law is intended to prevent you from doing a free, no-risk hedge of your long stock position (by selling a DIM call) just so you can keep it around for the necessary time to get long-term capital gains treatment - and as such, actually makes sense to me. It's a "if it looks like a duck" rule - if you've done something to eliminate all your risk, then you've performed the moral equivalent of selling your stock, and should be taxed the same as someone who did. Wonder if you can buy a WOTM (way out-of-the-money) put that's basically delta 1.00 to accomplish the same thing, though? Hmmmm.... -Rose-