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To: Nemer who wrote (48474)6/5/2003 12:35:37 PM
From: JSB  Read Replies (1) | Respond to of 53068
 
Since it's two separate accounts under
two separate social security numbers,
it's just smart, but not a wash.

OTOH, he could sell his shares tomorrow
and short it and accomplish the same thing.



To: Nemer who wrote (48474)6/5/2003 12:41:36 PM
From: BWAC  Read Replies (1) | Respond to of 53068
 
Well you'd think theoretically that a stock with a sizable dividend would drop by the dividend amount on ex-date. Negating the grand scheme. Of course it never works the theoretical way. <g>



To: Nemer who wrote (48474)6/5/2003 1:32:38 PM
From: SE  Read Replies (1) | Respond to of 53068
 
Screw the tax side of the equation, if it works and makes him money, who cares about the taxes. They are only a small portion of the total so he still has money left over in his pocket after all is said and done.

Now as to the tax side, seems to me, the short in his wife's account, from a tax side of the equation will trigger the gain on his long to be recongnized. With a new basis then starting on the day he purchases the short cover in his wife's account.

That would be the case I believe in WI anyway, a marital property state. I think TX is a community property state, so that should be the same result there. IRS never cares about specifics, they care about the substance. The substance is he is flat RJR as soon as he sells short in his wife's account.

All that being said, who cares. If this is a big guy....he has big guy accountant's right? That is his/their problem! :)

-Scoot



To: Nemer who wrote (48474)6/5/2003 3:04:15 PM
From: Mark Adams  Respond to of 53068
 
I understand you have to hold the stock 60 days to get the favorable tax rate on the dividend paid. So he may be looking at a way around that- capturing a tax favored dividend and a short term cap loss to offset gains/other income.

That said- he needs an uptick to short, and on the ex date, will he get a favorable one?

Folly, IMO.


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