How to create capital loss with options (or otherwise)

  • Thread starter Thread starter bpj
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bpj

I am looking for a way to create a capital loss. I thought that I could achieve it by using options on equities. Something like a wash sale to carry this loss through to a new tax year. I was thinking I could buy stock and sell it at a loss by exercising an OTM put option but then - how to buy stock back at the put strike price?
 
Alternatively, how do I sell stock in a private transaction via my brokerage account in the U.S.? I want to sell at a price below the market value and then buy it back from the buyer.
 
Why? It might have different tax consequences in different countries. I should be allowed to sell at a loss to whomever I want to - it is not illegal
 
Sounds like you got some really bad tax advice.
If you have a position that's currently in a loss, you can close the trade to offset a gain then buy back in 30 days.
Don't intentionally create a loss to offset gains.
 
You see, in a country where I am resident for tax purposes, the rules are different. Therefore, I was wondering if there is a way, for instance, to do a stock transfer with a cost base set at my discretion instead of just using the market value
 
There are ways to transfer profits from this year to next year.

Example 1:
1-Buy a January DITM Put & DITM Call (Delta near 1) on a good volume ETF (SPY, QQQ, etc..) or stock(AAPL, MSFT, etc...).
2-Last week of December close the losing position.
3-First week of January close the winning position.

Example 2:
1-Buy SPY and short QQQ. (Use highly correlated markets.)
2-Last week of December close the losing position.
3-First week of January close the winning position.

***Win should offset the loss. Loss will be reported on taxes this year & profits reported next year.
***Can do the same thing with the underlying in other highly correlated pairs (SPY vs. QQQ, GLD vs. SLV, SPY vs. DIA). Go long one and short the other.
***Price of underlying needs to move away from current price so you have a loss & profit.

***NOT TAX ADVICE, just ideas.
 
Last edited:
ETJ said:
Be very cautious about the tax opinions/advice you get here - form 550 should be your guide.
More...

Agree, as I'm neither a tax expert nor from his country, but intentionally looking to create a loss to offset a profit seems to make no sense in any country. :)

***My comments are not "advice", just suggestions/ideas.
 
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