Discussion:Short Sales
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Discussion Forum Index --> Tax Questions --> Short Sales
| 12 June 2007 | |
| What is treatment of Short Sales if the sales are in the prior year and they are covered in the following year ? 1099B reports all the sales, including the short sales, in current year. If we have to wait for it to be reported in the following year( since the gain or loss is realized in the following year, it will create a mismatch between 1099B and Schedule D.
Thanks for your help in advance. | |
| June 13, 2007 | |
| As I recall, I enter the cost basis and sale at same amount until it closes. | |
| 13 June 2007 | |
| Is there IRS guidance as regards to reporting on Schedule D ? | |
Death&Taxes (talk|edits) said: | 13 June 2007 |
| Up until a few years ago, there was actually a place on the Schedule D to note a reconciliation for items like this. Now such admonition is only contained in the Schedule D instructions under a "Caution."
I generally attach an explanation; JR's method is more prosaic in that the reviewer does not have to seek a statement for an explanation. | |
Msmith7305 (talk|edits) said: | 13 June 2007 |
| Praheja-
You had better check to see if it is a "short sale against the box". Generally, short sales are not reported on the 1099-B unless it is a short against the box. If so, it is a reporatable sale in that year. | |
| 13 June 2007 | |
| Should I advise the IRS why amounts reported on Form 1099-B do not agree with my Schedule D for proceeds from short sales of stock not closed by the end of year?
If you are able to defer the reporting of gain or loss until the year the short sale closes, you will need to attach a statement to your Form 1040, Schedule D (PDF) explaining the details of your short sale and that it has not closed as of the end of the year. This will allow you to reconcile your Form 1099-B (PDF) to your Form 1040, Schedule D (PDF) and still not recognize the gain or loss from the short sale. Include your name as it appears on the return and your social security number. For more on these rules and the rules for put options and wash sales refer to Chapter 4 of Publication 550, Investment Income and Expenses.
Publication 550, Investment Income and Expenses [[1]] | |
| 13 June 2007 | |
| Short sales of stock are on the 1099B, short sales of options are not.
On the Sched D match the proceeds with the short sales at the end. Show a subtotal which would match the 1099B and then subtract the incomplete short sale. Put the option sales at the end because they are not on the 1099B. | |
