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Pastimes : Organized Shorts - Could be watching your stock. -- Ignore unavailable to you. Want to Upgrade?

To: JGoren who wrote (236)12/8/1998 5:06:00 PM
From: EL KABONG!!!  Respond to of 271
 
JGoren,

Before engaging in a short-against-the-box strategy, you'd better check with your accountant regarding the timing of doing such a thing. In one of the tax laws passed a year or two ago, Congress changed the way the taxing of that strategy works. There are (or were) time caps placed on the strategy as well as a specific date cap (12/31 of every year, if I remember correctly). If you stray from the mandated ranges you'll end up owing taxes regardless of when or if you cover. In essence the law prevents you from locking in capital gains (tax deferred) for an unspecified time period. The law specifies exactly what outside limits of tax deferral will be allowed.

KJC



To: JGoren who wrote (236)12/8/1998 8:37:00 PM
From: Phil(bullrider)  Respond to of 271
 
JG,

I, in my limited history of trading, have come to realize that the only advantage of boxing is when you are short and your position is going against you. You box to avoid losing your borrow.

IMHO, since you can always buy, it does not benefit you to box to protect gains, since if you sell long shares, you can always buy them back.

However, if you are short, and cover, you cannot always get the borrow if you want to go short again.

Hope this helps,

Have fun,
Phil


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