Question: A taxpayer owns 100 000 shares of Microsoft Corporation currently valued
A taxpayer owns 100,000 shares of Microsoft Corporation, currently valued at $ 10 million. The taxpayer purchased the stock for $ 10 per share and thus has an unrealized gain of $ 9 million. The taxpayer faces a tax rate of 20% on capital gains. He has heard about a tax deferral strategy called “shorting against the box.” Explain this strategy to the taxpayer.
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