Re: Short Sales held between years

From: Rich Carreiro <rlcarr@animato.arlington.ma.us>
Subject: Re: Short Sales held between years
Date: Wed, 15 Mar 2000 08:59:13 -0500

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>If a stock is sold "Short", and is not bought back during the same year,
>how should this be accounted for on the income tax forms (Schedule D) ?

It is not reported.

>On the one hand, since the transaction is not yet closed out,
>perhaps no reporting is yet required.

Correct.

>On the other hand, the Short Sale is reported to the IRS by the broker,
>and perhaps needs to be included somehow in the
>"Total sales price amounts".

You attach a statement to your return saying something like "the
reason my total sales proceeds do not match what is reported to
me on all my 1099-Bs is that I have a open short sale which created
proceeds of $X."

>P.S.  Does your answer work with tax preparation software,

Yes, because you're just stapling in another piece of paper.

>and with electronic filing?

Probably not.

>Can you reference any IRS publication that answers this question?

The Schedule D instructions and Pub 550.

Rich Carreiro                            rlcarr@animato.arlington.ma.us

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