Dear illiquid:
Fascinating question! My answer is that your idea will not work. The Code does not give the taxpayer any discretion as to which gains/losses he will offset against a carryforward vs. which ones he will pay tax on. A taxpayer cannot pick and choose in an effort to reach the most desirable result. The Code sections that are involved here [Sections 1(h) and 1222] are very mechanical. They operate under a lock-step formula that reaches a particular result, like it or not. So I understand the rationale of your proposal, but the Code simply does not give you the choice to do what you propose.
Fascinating question! My answer is that your idea will not work. The Code does not give the taxpayer any discretion as to which gains/losses he will offset against a carryforward vs. which ones he will pay tax on. A taxpayer cannot pick and choose in an effort to reach the most desirable result. The Code sections that are involved here [Sections 1(h) and 1222] are very mechanical. They operate under a lock-step formula that reaches a particular result, like it or not. So I understand the rationale of your proposal, but the Code simply does not give you the choice to do what you propose.