aws

I've had more instances than I care to count where I do something like enter the inverse of what I intended on option spreads. In the IBKR platform the exact same trade could either need to be entered as a buy or sell depending on which order you added the legs to the quote. Getting an instant fill is almost always like a punch in the gut, as you know you must have screwed it up and it's too late to do anything. A more interesting type of mistake was something like ten years ago when I was new to options and thought I had found a risk-free profit box spread. It was for a new IPO that just had options open up that day. I double and triple checked to make sure I had everything right. I ran it through a model to make sure I was profitable at every share price, and I was. So I opened a few spreads and got an immediate fill, which should have been worrying but at the time it wasn't. I saw that my margin didn't go down and everything looked correct, so I opened a quite big position. The problem of course was that the only reason the trade seemed to be open was that there was a high interest in shorting the stock and the puts were much more expensive than the calls of the same strike. To get the spread to work I had to short a deep ITM call as one of the legs, which I didn't realize at the time was still risky even when you have a higher strike long call. I woke up next morning to the bad news that all my short calls were assigned and I was short a huge amount of the stock. The stock had a very high borrow fee and I realized there was no way to keep the trade open profitability and took a hefty loss closing it back out.

I-bonds are an obvious improvement on savings account or CDs, and to the extent you can afford a one year lockup at the start you should have your emergency fund in those instead of in the bank. I think it's pretty unlikely, and maybe impossible that bank deposits would beat the I-bonds in yield, let alone the tax deferral and state tax exemption offered. As an investment they'll never be that exciting unless they bring back substantial real interest rates. IIRC, when they first came out you were getting 3% fixed plus inflation. Getting the inflation coupon alone isn't going to make you real money, but locking in 3% fixed for 30 years on top of that, knowing they'll be periods of much lower real interest rates in the future is nice. And even if you lock in at 0 fixed now, if they raise the fixed to 1 you can just redeem the ones at 0 and reinvest at 1. It would be like refinancing your savings account when rates rise. Like refinancing your mortgage in reverse. Of course with the 10k limit per person per year you can't really do it with big money.

You could do something like turn around and longer dated calls against that to offset some of the amount on margin. But if they were ITM calls then the IRS would likely consider it a constructive sale, as anything that locks in a sizeable amount of your profit would be something the IRS is looking to tax.

You get until 5:30pm to exercise options expiring that day. The stock traded above $116 right after the close, so those who held options could exercise and then sell the stock for a small profit. Some brokers set the deadline earlier though, and I don't think automatic exercises take into account after hours activity, so that's probably why only some of yours were assigned. The rest weren't paying attention or were locked out by their broker.

I've been following MARA for about four years. It's been mixed up with a web of shady microcap stock frauds. At one point in 2017 it traded for something like a $4 billion valuation right after they announced the bitcoin pivot but before they had a single asset in place. It wouldn't surprise me that there were still paid pumpers working behind the scenes. Now with the incredibly loose money available this year and unprecedented ease of pumping stocks with the likes of wallstreetbets, they've spun it into something resembling a legitimate business. But still one that inexplicably carries a 1000% premium to tangible assets.

More MARA puts, this time March $40s. It's fighting the momentum, but it's too tempting after the stock got a fresh 30% or so boost since the last time BTC traded at these prices, even as mining profitability has predictably edged back down. I still see no reason the stock should trade above $10, but it's been a big beneficiary of retail mania and momentum. Since that cuts both ways, I'm hoping I have enough time for these puts to play out.

Probably depends on the broker. I've had quite a few untradable instruments hang around in my account for a couple of years, like during bankruptcy procedures. Never 12+ years, but if for whatever reason the broker forced you to remove it from their books, then you could probably just contact the transfer agent and get the shares registered in your own name. You should have the same rights in either case, although if nothing has materialized after 12 years those rights probably aren't worth much.

I heard the story about the Squid Game token a week ago. People with no affiliation to a piece of intellectual property pitch a game based on and named after it, raise millions of dollars from speculators, they steal it all in a rug pull and disappear. The website and social media accounts are gone, the project was always a scam and is not going anywhere. I thought that was the end of the story. People get scammed out of a few million dollars here and there all the time in the real world through ponzi schemes and whatever, so nothing too remarkable that it happens in crypto as well. On a whim though, I checked the market on that token today, and it's traded over $1 billion worth in the past three days and is sitting on a market cap of over $250 million still. That's for a project that everyone already knows was a scam and will never be worth anything. It would be like people rushing to buy shares in Madoff after he's already in handcuffs. I could understand maybe there still being some tiny residual market like there is for empty shell companies, but $250 million and on such high turnover is just wild.

McLane's revenue this year exceeded Tesla's, and since in the aggregate TSLA is still in a loss position, so has its net income since 2003. But apparently one was a crappy purchase at $1.5b, and the other is great at 1.2t. Obviously not relevant comparisons, but I find them funny.

Charlie responds: https://www.bloomberg.com/news/articles/2021-10-29/charlie-munger-defends-design-for-dorm-bashed-by-architect

I don't even really know who this 15% corporate AMT is meant to target. When many of the headlines about such and such big corporation paid no income taxes this year it usually seems to be related to R&D expenses or bonus depreciation. R&D expenses are deducted for both GAAP and tax, so this wouldn't really hit any of them unless the AMT will require adding back those amounts. Bonus depreciation is the one I see most often when there is GAAP net income but no taxable income, because for tax purposes millions or billions of fixed asset purchases are written off immediately whereas for book purposes they are depreciated over their useful life. But bonus depreciation has come and gone many times, and if you don't want that book to tax discrepancy then I don't know why you would keep the accelerated depreciation in the first place. As you say, Berkshire is probably hit harder than anyone because of the newish GAAP rules about taking unrealized gains into book income, but they would be an odd target for such a law because they actually pay their taxes. Unlike many large companies they don't do all these strategies to avoid taxes by shifting income to offshore entities in low tax countries. But I guess if a wealth tax for individuals is the goal, then maybe they want for corporations as well. I doubt either will end up happening as written right now, so I'm not too worried about it.

Someone did it again today with 1 share trading for 504k, or about 70k over the closing price. Starting to think I should have a GTC sell order just sitting out there. I can even give them a bargain and just have it at 50k over regular trading hour prices.

Oh he's outrageous. He used the bump in the price to award himself Elon Musk style tranches of free shares when the stock hit various market cap hurdles. 1.5 years ago the company had like $10 million of assets, and with the crypto hype near the end of last year they were able to issue about $500 million of stock to the public at inflated prices, and because they did that the chairman awarded himself about $100 million worth of free stock. My numbers may be off a bit, but that's the gist of what happened. Pure looting by him personally while cashing in on the hype. Yeah, the puts are expensive. It's tough to find a date/strike that feels very good with such a high IV, but this is where I've settled.

MARA puts, specifically Jan $40 puts. It's hard to short anything in the crypto space, but the more products that are available for the average investor the less it makes sense to own the ones that trade at massive premiums like MARA. Even with crypto at all time highs, the value of the crypto they hold is a little over $3 per share, and mining equipment installed that cost about $1 per share, and another $1 per share of equipment on the way over the next year or so. Mining revenue has gotten a big boost from the China bans, but how much can $1 per share of equipment really make? Even if it made 200% annual returns for a couple of years that's peanuts compared to the share price now, and in this type of business they are constantly coming out with new devices that are more efficient which drive down the value of the older ones. They got a pretty good deal buying a lot of miners before the big spike in bitcoin, but they will have to buy new ones at market price. They are half a commodity business, half a bitcoin investment fund, but both parts trade for 1000% of replacement cost and with many more investment opportunities that premium shouldn't last forever. But it's far from a sure thing since I'm sure you could make many similar arguments about meme stocks and GME put buyers haven't done very well either.

I'm not sure how serious you are being, but obviously Turbotax would not catch something like this which may not even be reported anywhere in your tax documents. If you sold your shares in one account and bought them back immediately in another account, your broker wouldn't report that as a wash sale as they wouldn't know the purchase happened, and since it's not in your tax documents it wouldn't be picked up by Turbotax.

Any of the doctrines of substance over form, step transaction, or sham transactions would make the whole thing fall apart if under audit, even if each individual transaction would appear to work. There's other ways to accomplish the same thing that also wouldn't work if examined: For example, if I owned 30k worth of stock that dropped to 15k. I could sell that stock, gift the 15k to my brother, he could buy the stock in his name, and then gift the stock back to me. Now I have the shares with the lower basis (his cost) and a tax loss. All transactions are below the annual gift limits so they are not even reportable, and each on their own is a perfectly fine thing to do, but together they are not allowed.

I know nothing of Canadian tax law, sorry.

I see now that the discussion is more about whether you can skip the 31 day hold period with this strategy. That I am much more skeptical about and I'd really like to see the original suggestion by the Deloitte partner, as I suspect some important details may have been omitted by the article author. If I were an IRS agent and I were auditing someone who: 1. Sold stock for a loss 2. Bought a call option to trigger a wash sale 3. Immediately sold the call option to lock in the loss 4. Bought back the stock the same or next day and claimed a fresh cost basis I would invoke substance over form and say there was no real sale and no loss is allowed.

I'm not sure what you mean. If ACB is adjusted cost basis, then there is no adjusted cost basis in this scenario as by waiting 31 days you avoided the wash sale adjustment entirely.

There's a lot of posts I'm not sure I want to read here, but from skimming it seems like the whole argument about whether this situation is a covered call is kind of missing the point. We are all in agreement that it is fine if you double down on a stock in a losing position, wait 31 days, then sell the high basis stock for a loss and keep the low basis shares. The proposed transaction of buying a call option plus the long stock is essentially also doubling your long position, and it should open up an opportunity for tax loss harvesting just like if you bought more of the stock. So if the call option is considered substantially identical to the original shares, then I see no reason why it wouldn't work. Using the deep in the money call example, every scenario after 31 days is exactly the same as if you just doubled your position with shares, with the exception of if the stock dropped so far that the deep ITM call was now OTM and you did not exercise. So there's that tiny chance of an upside, but you also pay a tiny premium there so it's not really a huge advantage. If you used ATM or OTM calls then you are risking much less to double your position, and you may have a more efficient way of doubling your position, but you also pay a higher option premium to do so and if it's far OTM you risk it no longer qualifying as a substantially identical position.

I have surveyed the FIRE community, and while it doesn't really fit my lifestyle, I certainly wouldn't characterize them as a miserable lot. Many people have huge amounts of fat to trim in their budgets - spending that provides little incremental benefits or even causes a burden when you accumulate a bunch of useless junk that clutters your house. Removing those layers of spending and working toward financial independence should make you happier, not miserable. Although that's mostly just for the people who were high income to begin with, as it's a lot easier to try to save half of a 300k income than half of a 30k income.

Shame when they go so young...

Yeah, that will be more of a headache if it comes to pass. Presumably they will issue guidance by the time it becomes effective so we would know more than we know now about what they would consider reasonable. And if you think that's bad just imagine the accounting nightmare that would happen if some type of wealth tax were ever passed. There every asset of every person would need to be valued every year no matter how it is held. And of course they'd need to supplement it with a million rules to avoid you shifting assets to relatives to get under the taxable threshold, so you would need to look at not just your assets but also the aggregate assets of your family to determine the tax base.

I would say you could use any reasonable method for the annual value reporting since it doesn't really matter for anything. If it were me I'd probably just use something like a zillow estimate or something as it wouldn't take any work and would be at least somewhat reasonable. It's when you take it out of the IRA that you would want to have something like an appraisal to support your value, because then it actually affects your income. Valuation issues come up all the time. There can be very wide discrepancies between what someone reports and what the IRS would agree to. For a dramatic example just look at the Estate of Michael Jackson court case that was recently wrapped up. The Estate claimed a value of something like $5 million, the IRS said it was more like $1 billion and whacked them with massive taxes and penalties, but in the end they won in court and got all the penalties thrown out and only paid tax on about $100 million. In my experience, if you start with something reasonable, then even if you get audited it's likely going to sail right through. It's when you claim something egregiously low that they go after you hard. Claiming zero is as low as you can get, but at least you can support it, there's no clear alternative value, and I assume it's not a huge dollar figure unlike the MJ case, so I doubt you would have issues if it comes to that. While this law may add a new reason people may be forced to take money out of IRAs, required minimum distributions have been around a long time and they are essentially the same thing. I imagine there must be some court cases in which people have held those types of assets in an account subject to RMDs where this issue came up. There you would need to not only figure the value, but you'd need to do so every year and it would affect both how much you need to take out of the IRA and how much you pay tax on. I'd look for how the court and the IRS handled that issue since it will basically be exactly what you are talking about now.

There wouldn't be any place to report depreciation deductions if the assets were owned directly, nor any benefit from doing so. You would report the value on form 5498, and they want you to report fair market value. So just like you would report the current market value of stocks, not original cost basis, you would report the current fair market value for real estate and not some cost minus depreciation calculation like you might do for a partnership or individual tax return. This is a snippet from the instructions to the form 5498: "Trustees and custodians are responsible for ensuring that all IRA assets (including those not traded on established markets or not having a readily determinable market value) are valued annually at their FMV"