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To: SJS who wrote (9079)	6/19/1999 2:36:00 PM
From: SJS	Respond to of 14427

Wow! Check this out from the IRS publication ALSKI showed us. This is regarding a short against the box (long 100, then shorting 100 while long the 100): _____________ Example. On May 1, 1998, you bought 100 shares of Baker Corporation stock for $1,000. On September 3, 1998, you sold short 100 shares of similar Baker stock for $1,600. You made no other transactions involving Baker stock for the rest of 1998 and the first 30 days of 1999. Your short sale is treated as a constructive sale of an appreciated financial position because a sale of your Baker stock on the date of the short sale would have resulted in a gain. You recognize a $600 short-term capital gain from the constructive sale and get a new holding period in your Baker stock that starts on September 3. Here's another one: Example. Even though you do not own any stock of the Ace Corporation, you contract to sell 100 shares of it, which you borrow from your broker. After 13 months, when the price of the stock has risen, you buy 100 shares of Ace Corporation stock and immediately deliver them to your broker to close out the short sale. Your loss is a short-term capital loss because your holding period for the delivered property is less than one day. Here's the publication and section/subsection I was reading from: irs.ustreas.gov