Generating stock loss?

The idea behind buying a put and selling a call is to achieve a delta neutral position whereby you neither make nor lose money with the shares bought and the sale of the call options help reduce the overall cost of structuring the position. Were the cost of the options negligible then yes buying a put is more than sufficient and gives you the ability to benefit from any additional gains while you wait to do the sale. However I think you are confusing two, perhaps three potential strategies to avoid taxes, one would be to carry a balance of the equity long term so that if you do decide to buy and then sell at a loss, you can claim that the sale was of a share you were holding long term. If you bought shares and wished to sell them with 31 days at a loss and then wished to resume the position, you could buy a call option and defer the resumption of your position till after the 31 days and if you're happy with paying the current price, you can offset the cost of the call option by shorting a put. If you bought some shares, would be happy to sell it at the current price but wish to defer the sale perhaps for the lower long term capital gains rate then you could buy a put option and so long as you don't mind selling at the current market price even if the market price went up then you could offset the cost of the put option by shorting a call. There shouldn't actually be a need to buy additional shares if all you're trying to do is to defer the actual date of a buy or sale.

Of course, if you emigrate to Canada, renounce your US citizenship then you can trade within your TFSA account and pay not taxes or even if you invest outside of a tax shelter, there's no distinction between long term and short term capital gains in Canada, 50% of the capital gains would just be taxable as regular income. Despite being a more socialist country, the overall tax load in Canada is marginally less than in the States unless you're a redneck baby producing factory in which case the States has a definite advantage due to various earned income credits, currently the tax system in Canada encourages individuals to incorporate and operate small businesses, receiving their remuneration mostly as equity or dividends, if you can work as a consultant and take on contract work, you can easily halve your taxes as corporate taxes are now just 18% in Canada compared with 35% in the US and will soon be 15% plus depending on where you are in Canada, you may actually be paid by the government to receive dividends. It really makes you wonder what kind of baloney the allegedly pro business politicians have been serving the masses over the past two decades.

Yes, buying puts provides you with the downside protection. The benefit of also selling calls is that the premium you receive for selling the calls can offset some, or all of the cost of buying the puts. This gives you the downside insurance policy on your shares for little or no money.

The downside to this particular strategy is that if the stock makes a big run up, the calls will be exercised and your shares will be taken from you at the strike price.