Chapter 41: Taxes 931 
in any of the strategies. Commission costs and the dissipation of time value premium 
in purchased options will both work against the strategist. 
A tax advisor should be consulted before actually implementing any tax strate­
gy, whether that strategy employs options or not. Tax rules change from time to time. 
It is even possible that a certain strategy is not covered by a written rule, and only a 
tax advisor is qualified to give consultation on how such a strategy might be inter­
preted by the IRS. 
Finally, the options strategist should be careful not to confuse tax strategies with 
his profit-oriented strategies. It is generally a good idea to separate profit strategies 
from tax strategies. That is, if one finds himself in a position that conveniently lends 
itself to tax applications, fine. However, one should not attempt to stay in a position 
too long or to close it out at an illogical time just to take advantage of a tax break. The 
tax consequences of options should never be considered to be more important than 
sound strategy management.