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Author: borsaci Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121351  
Subject: how to report short sale Date: 2/18/1998 1:18 PM
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I was just puzzled on how to report a short sale. How do I show sale price. Is the sale price the amount (negative) that I paid to cover and the buy (cost basis) is the negative amount I received when I shorted. More importantly, when calculating the sum of net total prices, how is that effected. Any answers or pointers to examples will be greatly appreciated....

--Saban
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2132 of 121351
Subject: Re: how to report short sale Date: 2/20/1998 2:17 PM
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[[I was just puzzled on how to report a short sale. How do I show sale price. Is the sale price the
amount (negative) that I paid to cover and the buy (cost basis) is the negative amount I received
when I shorted. More importantly, when calculating the sum of net total prices, how is that effected.
Any answers or pointers to examples will be greatly appreciated....[[

The instructions for Schedule D should help you out.

But lets assume that you opened and closed this position all in 1997. The date acquired (columb (b) of parts I or II) is the date the property was dlivered to the broker or lender to close the short sale. The date sold (column (c) in Parts I or II) is the date you sold the stock that you borrowed to open up the short sale. You then report the purchase and sale prices as you normall would.

But, if you "shorted against the box" in the latter part of 1997, you may be subject to the new constructive sale rules...so be careful.

TMF Taxes
Roy

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Author: IntenseAnalyst Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2139 of 121351
Subject: Re: how to report short sale Date: 2/20/1998 6:11 PM
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How do you report short sales which are result in wash sales? My understanding is that if claim a loss on a short sale and then open another short position within 30 days (before or after) you have washed the loss. Does that loss go into the basis of the new short?

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Author: KATinChicagoland Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2149 of 121351
Subject: Re: how to report short sale Date: 2/21/1998 12:41 PM
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<<I was just puzzled on how to report a short sale. How do I show sale price. Is the sale price the amount (negative) that I paid to cover and the buy (cost basis) is the negative amount I received when I shorted.>>

No, that's your *purchase* price. It's confusing because you sold before you bought, but a short sale is still a sale, and when you cover you are making a purchase.

<<More importantly, when calculating the sum of net total prices, how is that effected.>>

Not sure what you mean here. But if you report the proceeds of the short sale as the amount realized on the sale, and the amount paid to cover as the purchase price, you should come out right.

KAT in Chicagoland
www.fairmark.com
Tax Guide for Investors



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Author: zitz Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3023 of 121351
Subject: Re: how to report short sale Date: 3/24/1998 2:46 PM
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Could TMFTaxes continue his response?

What if you didn't cover the short in 1997?
What is your "purchase price" then?

You suggest that rules changed "late in 1997" How late?

I'm using Intuit's program, and they have no entries
under short sales in their help.

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 3077 of 121351
Subject: Re: how to report short sale Date: 3/26/1998 6:48 PM
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[[ What if you didn't cover the short in 1997?]]

No problem. It would remain open until you close it. But you still must report the "sale" in the year that the short is established.

[[ What is your "purchase price" then? ]]

If the short is open at the end of 1997, the "purchase price" would be "n/a".

[[ You suggest that rules changed "late in 1997" How late?]]

The constructive sale rules became effective in August, 1997. They will NOT impact you if you only have a short sale. But if you are "short agains the box", or have some other more sophsticated hedging technique, the new law could apply to you.

[[I'm using Intuit's program, and they have no entries
under short sales in their help.]]

Sorry...I'm not that familar with TTax, so I can't really comment.

TMF Taxes
Roy

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