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Author: RockyTopBob Big gold star, 5000 posts Old School Fool Pro Community Winner Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121596  
Subject: Dividend payments on shorts Date: 3/31/2014 11:57 AM
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Hi all,

I had heard that it is possible to claim the dividends paid in lieu when holding the SPY ETF short. (or any dividend paying position shorted).

I can only find where margin interest is claimed. I'm using TurboTax.

If it has to be claimed as a misc investing cost, it has the 2% cap, which does me no good.

If you can claim these dividends, where do you do it?

If this topic has been discussed, please post a link.

Thanks,

Bob

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 120633 of 121596
Subject: Re: Dividend payments on shorts Date: 3/31/2014 12:56 PM
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How you deal with payments you make in lieu of dividends is discussed on page 58 of IRS Pub. 550, Investment Income and Expenses, www.irs.gov/pub/irs-pdf/p550.pdf. Whether they are deductible itemized expenses or adjustments to cost basis is determined generally by the length of time the short position is open.

Ira

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Author: RockyTopBob Big gold star, 5000 posts Old School Fool Pro Community Winner Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 120634 of 121596
Subject: Re: Dividend payments on shorts Date: 3/31/2014 1:17 PM
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Thanks Ira,

I read that section but I got confused by investment interest, not subject to 2% and that with no limitation.

I held the shorts as hedges over a year. I'll go back and find where to enter the payments in TurboTax.

Regards,

Bob

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