Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Paired Trades and Hedging Strategies -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (80)	1/15/2005 7:10:01 PM
From: TimF	Respond to of 136

Without rules like wash sales and straddle rules, sophisticated investors need never pay capital gains - gains can just be successively pushed off until the following year until the investor finally dies, whereupon their heirs get a step-up in basis. They get a step up in basis but they have to pay inheritance taxes on the whole position. Alternatively I could support eliminating both the step up in basis and the inheritance tax. In any case even with wash sale and straddle rules investors can avoid capital gains, by buy and hold, or by strategies like the one you posted about, or by selling for a loss and buying back as soon as the 30 days is up. You don't even really have to be all that sophisticated to do this. Tim P.S. If anyone considers discussion about tax law, esp. discussion about what it should be rather then discussion about how it might effect "Paired Trades and Hedging Strategies" I'll drop the conversation or move it elsewhere. Tim