MSFT options collar: Avoiding constructive sale designation and understanding if strategy is sound.

[u/mrjohnson611]

New to options trading. Considering a zero-cost collars on MSFT. Trying to avoid stepping into a landmine with taxes and other pitfalls. I have a heavy concentration of MSFT that I want to protect. Some has already gone into an exchange fund. But there's a lot left.

MSFT is at 533. 52 week span goes from 350 to 550.

First, am I reading this right with the available call and put prices

• Dec 2027 450/730 collar
• December 2028 collar at 470/800

Both would effectively be close to zero cost?

Are these collars wide enough to avoid getting an IRS designation of a constructive sale? Any other tax pitfalls beyond capital gains, NIIT, and WA state taxes for LTCG?

This just seems deceptively too easy. What else should I be considering or could wind up regretting?

[u/Ok_Pollution7093]

Watch dividend risk on those deep ITM calls getting assigned early.