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Tax Straddle
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A reference to any of a variety of low market risk tax reduction techniques. These techniques frequently use options and futures to create an advantageous tax position with deductions available early and income deferred. Alternately, nondeductible capital losses may be converted to ordinary losses which can be deducted against ordinary income. Opportunities for tax straddles were sharply reduced in the United States by the 1986 tax reform act.
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