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Subject:  Re: capital gains when you short Date:  7/19/1999  1:27 PM
Author:  fling Number:  17480 of 127753

In your case, again assuming I've read your notes accurately, you sold before holding for a year and a day, meaning you are paying regular income taxes on that set of ISOs, rather than the long term capital gains rate. While your objective of diversification is a valid one, your method of getting there sounds (if I've read you accurately) unBuffetlike (i.e., rash). This is particularly so if you are quite confident that the company is going to continue to improve its price.

Yes, you've read correctly. Well, my original plan was to hold the whole thing more than a year, treating, as you said, like the whole thing was a gift. But several friends of mine urged me to treat it like it's my money, since I do own them now. Then as the stock price has gone up much faster than I expected (it's at now where I thought it would be a year from now), pushing up its percentage of my net worth, I did get a bit nervous, which was why I wanted to see if shorting would avoid the problem.

Oh well. Anyway, thanks for the advice. I'll try to keep from doing anything rash again if the stock jumps up again.
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