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Posted by Stuart A. Bronstein on June 23, 2006, 10:18 pm
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malibu.ron@verizon.net wrote:
> 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.
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
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