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The old technique was to take a bull or bear spread, lift the losing leg
before the end of the year to offset short term profits, and then, in the
next year, lift the other leg, thereby moving the profits to the following
year and delaying, not avoiding your income tax liability. Unfortunately, a
lot of equity traders discovered this technique a few years ago and now the
government requires future traders to calculate 'mark to market' at year end
and pay taxes on unrealized profits. It's the only place I know where we
have to actually calculate out the taxes we owe based upon money we haven't
made yet (paper profits). So us futures traders are 'screwed' to say the
least.
That's why some futures traders have set up off shore and then only pay
taxes when they bring the funds back into this country as income. Haven't
done this myself yet, but have looked at it. With the internet, this is
getting easier and easier, IMHO.
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]
On Behalf Of Bill Saxon
Sent: Friday, August 14, 1998 9:25 AM
To: Metastock EMail List
Subject: Futures
A question for some of you Futures traders. I have never traded Futures or
Options. I have some core holdings with tax gains that I want to hedge
against
a falling Market. How would I go about that and what is the best vehicle?
Would Options be a good way? How much leverage is it and how could I get
away
from Time Decay. I don't know how long I'll need them.
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