The inflated partnership interest is then sold at a loss and the phony loss is used to offset a real gain from the sale of appreciated stock or other assets.

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Here again, these two positions offset one another and there is no net gain or loss on the straddle itself.

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Last year, Intel sold much of its stock to take a loss and offset a big gain it had in another investment.

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These two positions therefore offset one another, and there is no net gain or loss on the straddle itself.

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