Hello,I haven't had much success with answers to this question, but I'll try one more time. Sorry to keep bothering everybody!Hypothetical situation:Suppose I own 1,000 shares of YHOO at Schwab and have held these shares since 1995.Now suppose I make a living off of playing market-maker. I have one account (say Waterhouse) where I try to buy stocks on the bid. And then I have another account (say Datek) where I attempt to sell at the ask simultaneously.One day, I decide to play market-maker in YHOO. I successfully and simultaneously buy 1,000 shares long of YHOO at Waterhouse and short 1,000 shares of YHOO at Datek, capturing a 1/4 spread for a small profit.I exit both sides of the position later in the day to capture this small profit.Note that since the buy and sell transaction of 1,000 shares on Waterhouse is in a different account than my long-term holdings at Schwab, the 1,000 shares sold can be "identified" as the 1,000 shares I purchased a few hours earlier in the Waterhouse account.Now, the "intent" of the short position I undertook on Datek was used to hedge the position on Waterhouse, and not my long-term holdings at Schwab. However, as far as I can tell I have no legal way of claiming that this short position was to hedge the long position on Waterhouse and not the one on Schwab.My question is - what are the tax implications of these transactions? In other words, would the short position on Datek be deemed a "constructive sale" on the Waterhouse shares or Schwab shares? Or can I "identify" which shares the short position hedged? If so, how? By keeping good records?Thanks for any help you can give me,Carl Erikson
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