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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (355)	12/30/1997 9:51:00 AM
From: Rutgers	Read Replies (2) \| Respond to of 5810

Year End Strategy ......................... More Hypos: You are currently sitting on two stocks. One of which you have traded during the year and you have a capital gain. The other you have not traded, but it currently has a paper loss that, if you sold the whole thing, would not only wipe out the capital gains for the year, but also result in more than the $3,000 limit for losses. Thus, it seems to me that you have at least four choices: First, do nothing and pay some capital gains. Second, sell only so much of the DOG to equate to a $3,000 loss for the year. Third, sell all of the DOG and carry the loss over $3,000 to next year when you expect to sell the WINNER and have to report more gains. Fourth, sell all or part of the DOG and then purchase some CALLS (for Feb., March, April or longer out), which would not subject the capital loss to the wash sale rule. It would also seem to me that the decision to sell should be based upon what type of rebound, if any, you expect the DOG to make in early '98. I am thinking of going with the fourth option. Can someone confirm that if I sell the underlying 1000 shares of DOG today and also purchase 10 CALL CONTRACTS, that I won't be affected by the WASH RULE?