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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121316  
Subject: Re: Taxes and short sales Date: 7/8/2000 1:17 AM
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I own 100 shares of XYZ that I bought at 100. I went short 100 shares against the box at 90.

You've almost certainly got a constructive sale at this point.

The stock is now at 95. When using my original shares to cover the short how are tax implications computed?

a) My assumption is that I subtract the short sale price of 90 from the original basis of 100 for a 10 point loss.


Yep.

b)Does the current market price of XYZ (i.e. 95)at the time of covering figure in this any way?

Nope.

I think there's an article on constructive sales in the FAQ. The link is at the top of this page. You might want to read it to get a handle on constructive sale issues.

--Peter
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