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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Ken Holbert, Jr. who wrote (7)	1/1/1998 11:08:00 AM
From: Roger A. Babb	Respond to of 18691

Ken, let's let your tax question ride and see if someone with more tax expertise than I will attempt an answer.

To: Ken Holbert, Jr. who wrote (7)	1/1/1998 11:26:00 AM
From: Craig Richards	Respond to of 18691

Ken, I have held short positions past the end of the year a few times, and have always just included a note (with my name and number on it, of course) indicating which sales made during the year were uncovered short sales. I have never had a problem from the IRS in regards to this. I believe this approach is mentioned somewhere in the directions for the capital gains form. Craig P. S. Best wishes for a healthy and prosperous New Year to all who hang out on Roger's Short Picks thread.

To: Ken Holbert, Jr. who wrote (7)	1/1/1998 11:44:00 AM
From: Ben Graham	Respond to of 18691

You should not report proceeds from open shorts on Schedule D. You should attach a statement to your tax return reconciling the proceeds reported by your broker with the proceeds reported by you. A sample format would be as follows: Gross proceeds from sale of securities as reported by your broker minus proceeds from short sales in 1997 and still open at year end plus proceeds from short sales prior to 1997 that were covered in 1997 minus sales price amounts reported on Schedule D (result should be zero) Hope this helps!

To: Ken Holbert, Jr. who wrote (7)	1/1/1998 1:32:00 PM
From: Dante Sinferno	Read Replies (1) \| Respond to of 18691

IRS Forms and Publications link.... irs.ustreas.gov Rob

To: Ken Holbert, Jr. who wrote (7)	1/2/1998 3:29:00 PM
From: Bob Miller	Read Replies (2) \| Respond to of 18691

Ken: The IRS does compare totals reported on broker 1099's to amounts reported on Schedules D. By attaching a note to your return , your situation will often be overlooked. 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. I can cite no IRS Code or Regs for this position, but I have done it for years, and have bounced the idea off several IRS employees of my acquaintance, with no adverse reaction. Happy taxes. 1998 will make you feel very clever for shorting. Best wishes, Bob Miller