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Any Alternative to stock "put" or "short against the box"

Here is a real challenge. I purchased shares of a penny stock that increased in value from $.51 to $1.90 in two years. It is a bulletin board stock, not listed on any pinksheet or other exchange. I would like to lock in the profit and sell shares over several years when I want cash. Selling everything at once I will be subject to the favorable long term capital gains taxes but I will also incur the wrath of the ATM. By selling off over a few years I can avold the ATM. My broker informs me they cannot do a "short against the box" or write a "put" due to the low price. Does anyone have a solution. I am not complaining about my windfall. just trying to optimize the situation.

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Reply to
malibu.ron
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The only thing I can think of is doing an installment sale. The problem is that it's just not realistic for anyone actually to pay that way, because in the end you may end up not getting paid. If you're a real good customer perhaps your broker will do it with you. They buy it all now at $1.90 and sell it for the same price, so they have no taxable income. But they pay you off over several years, and you recognize income as it's received. Stu

Reply to
Stuart A. Bronstein

If they're not allowed to short, you're stuck.

Get a better broker. If there's enough money involved (you don't say how many shares), there are things they can do (e.g. a total return swap) to lock in your price. However, if you aren't careful, you can lose the long-term capital gains treatment; for instance, if the stock drops back, you have a short-term profit on the contract and break even on the stock. Seth

Reply to
Seth Breidbart

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