I have a stock, say XYZ, with a HUGE gain. It is VERY volatile, so I'd like to unload it, but take the profit next year. (Say I am in the 25% tax bracket)
Any ideas?
I can buy puts, but they are hugely expensive due to the volatility.
Can I sell it short, but close it out next year (that seems illegal)
Mel
I found this:
Disclaimer: I have no particular tax expertise. So you need to read up on this on your own.
Can you explain why you don't just wait until after 12/31 to sell it? That might help. Are you afraid it might go down? Is it Tesla perchance?
Roger:
It's MRNA (Moderna). Huge run-up. Any hiccup and it nosedives.
Too bad there are IRA restrictions.
Otherwise, I could put the profit into an IRA, deduct it, then withdraw it next year. Right.
Mel
Usually a way to do this is to short a highly correlated security. For example, if you have an S&P index fund, you can short an S&P ETF (which is generally not considered the same as long as they are not different share classes of the same fund), or alternatively a total market index ETF or an S&P growth ETF and an S&P value ETF. But I don't know that there is something directly comparable here.
Tesla is actually up about the same amount as Moderna. Go figure.
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