Income Taxes and Record Keeping ( tax ) Message Board

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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )

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To: Colin Cody who wrote (1724)	1/11/1999 2:28:00 PM
From: upanddown	Read Replies (1) of 5810

Colin: I would appreciate your opinion on a tax question.... You short a stock using a taxable account. The position begins to go against you and you long the stock in a tax-deferred (IRA) account and neutralize the position. The short continues to go against you. During this rise, you trade the long several times trying to catch bounces and dips. Eventually you close both sides but, depending on market conditions, may or may not leg out of the position. The end result is that you have a significant loss in the short which is mostly offset by the IRA gain. There has mostly been a funds transfer from taxable to tax-deferred. My main question is whether the taxable loss is deductible or must be offset by the net gains from multiple long positions in the IRA. TIA, John

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