Is selling long covered call a good tactic for delaying taxes?


Let’s say I buy at $10 and it ran to $20. I don’t want to pay for short term gains taxes. But can I sell a covered call at like $5 expiring more than one year from now and let’s say I sell each contract for like $16.5. I walk away with the cash. After 1 year, the stock is called away and I get the remaining cash.

Then I net gained like $11.5 per stock and it’s a long term gain instead of a short term gain and is then taxed slightly less. Plus I only need to worry about paying the tax the next year (so about 2 years from now!) when taxes are filed.

Of course I can lose more if the stock run more. But if I don’t expect the stock to run, or I’m perfectly ok with giving up more gains, this seems to be a reasonable tactic to ‘sell but don’t pay taxes now’?


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