Underwater covered call and donating the underlying stock as a tax strategy?
I have some super underwater covered calls and was thinking about what's the best way to get out of them. I'm not sure if I just thought of something useful or if there's flaws.
Here's my example: I bought ABC stock for $10 forever ago. I sold covered calls super early at a $20 strike and just keep rolling them, but there's really not much value in rolling anymore because the stock is on a mega run and is now $200.
If I donate the underlying to charity, I get to write off $200 (which avoids $190 in capital gains). At the same time, I can take that $20 covered (naked now after donating the underlying) call and close it for a huge loss.
Would this effectively allow me to almost get like a double deduction out of it? I get away from having to pay capital gains which is almost the full amount given the run up, and then now I also get to claim a huge loss on the call?
Is there anything wrong with this strategy other than I am not getting any money out of it - but that's okay I'm willing to donate to charity. This seems to be much more tax efficient for me than just donating directly... someone help me either validate this or tell me what's wrong with the plan. Thanks!