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Any way to lock in gains w/o paying short term rates?
6 months ago, I bought 100 shares of X at $100 per share. Now they are worth $150 per share and I want to sell. If I sell now, I pay short term tax rates of around 30%. If I wait 6 more months, the long term tax rate will be 15%.
What I am trying to figure out is if there is anyway to lock in the gain now so that I could avoid paying short term rates. Obvious techniques would seem to be selling short or buying puts, but it appears these cause the resulting sale of the underlying stock to be treated as short term sales, even if I wait the full year. (Google "constructive sales" or look at IRS pub 550.) Anyway, just looking for confirmation that I basically need to just wait 6 more months and hope the stock doesn't crater in the meantime. One semi-loophole I was imagining is that I could short sell something that I think is strongly correlated with the stock I hold. Any thoughts on that? Any other ideas? Thanks. |
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