Since the date acquired is after the date sold, how should I report a short sale on Schedule D?
This can be confusing with a short sale since it is really a two-step process. The date sold is the date that the transaction closes, which is the date you deliver to the lender the stock or (other assets) that cover the short sale. The date acquired is the date you purchased the stock (or other assets) delivered to the lender. Normally, the short sale of a capital asset is considered to result in short-term gain or loss since the stocks (or other assets) that are delivered to “cover” the short sale are purchased the same time as the delivery. However, if stock held by the taxpayer for greater than one year is used top cover the short sale, then the gain or loss is long-term.
Related Questions
- I held stock substantially identical to the stock I sold short, but I covered the short sale with shares that I purchased later. How does that affect the way I report the short sale?
- If a stock was sold short prior to the end of the year but was purchased in the next year to cover the short sale, when should it be included on Schedule D?
- What is the penalty for not taking the plates off a sold vehicle and not doing a report of sale?
