From the article:I get what you are saying; but your strategy does attepot to convert income not offsettable against capital loss carried forward to short term gains that is offsettable against capital loss carried forward. So perhaps the exact argument made against BOXX cannot be made against your strategy but potentially a similar argument could be made? I am not a tax lawyer either.....I'm not a tax lawyer, but I think the answer is clearly no. For one, the anti-conversion rules are intended to prevent the conversion of income subject to income tax rates (interest income and short-term gains) into long-term gains that have more favorable tax treatment. My strategy doesn't seek to do that at all. Also, the argument against BOXX is that it falls under the "marketed or sold as producing capital gains from a transaction" definition of 1258(c)(2)(C). My strategy does not fall into that or any other definition of a "conversion transaction."Any concern that the same arguments made against BOXX in that article you posted, could end up being applied against this strategy?
ETA: The latest episode of the Bogleheads podcast features Wes Gray, CEO of the maker of the BOXX ETF. It was interesting that he studiously avoided any comment on the tax implications of the ETF; clearly they're trying to avoid the "marketed or sold as producing capital gains from a transaction" definition of the law, even though that is very clearly what they're doing.
Second, to be considered a conversion the transaction must be one of four specified types—with Nos. 3 and 4 especially relevant here: (1) a “cash and carry” trade, (2) a straddle (3) a transaction that has been marketed or sold as producing capital gain from a time value return, or (4) any other transaction specified by Treasury regulations.
Do you believe my strategy falls into one of the four?
Statistics: Posted by 02nz — Sun Jun 09, 2024 4:27 am