Managing Concentrated Single-Asset - Tax

Many tools are able to manage concentrated single asset.

Apart from outright sale, any methods will result in tax unfriendly (will be taxed immediately)?

selling a front month call ITM

buying a front month put ITM

Thanks. Will tax authority smart enough to pick that up?

yes because your position will be exercised (sold)

Thanks, but ITM option is not the way to manage concentrated position? (at least not in CFA L3)

I think recapitalization also results in immediate taxation to the portion sold.

Thanks! Yes, recapitalization should result in taxation…they are staged exit strategy.

Seems will need to pay tax at the first stage.

You asked with strategies would cause a taxable event, I gave you two.


Add one point, sale and lease back(property) will also trigger tax issue.