1. Using basket options to convert short-term gains into long-term gains
2. Using collars to avoid paying capital gains taxes
3. Using wash sales to time the recognition of capital income
4. Using derivatives to convert ordinary income to capital gains or convert capital losses to ordinary losses
5. Using derivatives to avoid constructive ownership rules for partnership interests
6. Avoiding income taxes by deferring compensation
Iremos desgranandolas una por una:
Vamos a empezar con el mejor gestor de la historia, Jim Simons y la estrategia de la cesta de opciones: http://www.bloomberg.com/news/articles/ ... ws-irs-ire
The top federal rate on long-term capital gains, derived from selling investments held for more than a year, is currently 20 percent, compared with 39.6 percent imposed on wages and investments of less than a year. Before this year, the short-term rate was 35 percent and the long-term was 15 percent. The Medallion fund trades stocks and futures so frequently that, absent the tax maneuver, it would generate mostly short-term gains, said the people with knowledge of the matter.
Barclays bought a portfolio of stocks and other instruments that fund managers at Renaissance wanted to trade. The bank hired the fund managers to oversee the portfolio, paying them a nominal fee.
Then Medallion bought an option with a term of two years, whose value was linked to the worth of the portfolio. Renaissance had full discretion to trade the securities in the portfolio.
Medallion could claim it owned just one asset -- the option -- which it held for more than a year, allowing any gain to be treated as “long-term” when its investors reported the income on their personal tax returns.
Its flagship Medallion fund has returned about 80 percent annually before fees since 1988, according to the Bloomberg Billionaires Index.
Simons and other Renaissance employees own almost all of the fund. Medallion stopped new investments from outsiders in 1993 and kicked out most non-employee investors in 2005.