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Strategies & Market Trends : Roger's 1998 Short Picks
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To: Bob Miller who wrote (53)1/4/1998 11:54:00 AM
From: Ken Holbert, Jr.  Read Replies (1) of 18691
 
Thanks Bob,

"What I have done is: under short-term trades list the description
as "IBM-Short Sale", show the trade date and purchase date as the
same for opens shorts, show the proceeds amount in the both the
sales price and basis columns. Thus there is no gain or loss, but
the total volumn of your trades will agree with the broker report."

That is exactly what I did last year. However, now that I have closed the short position, I will need to list the short sale proceeds again this year on the Schedule D and show the date and basis of the closing transaction. This will not match with the 1099 from my broker showing stock proceeds.

I think I will attach another note describing the way I handled the transaction and hope for the best. Believe it or not but I am a tax auditor for the State Department of Revenue. I have delved deep into this subject of reporting and cannot find anyone with a difinitive answer. Granted my area of expertise is more in sales and use taxes rather than income taxes.

FWIW in my experiences, I have not heard of many audits where stock transactions on schedule D were adjusted. If you use logic and everything is well documented, then in "gray" areas such as reporting short sales in which the transaction is still open, one should not have any trouble.
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