Dividends I Paid Out On A Stock That I Have Sold Short

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Subject Author Date Dividends I Paid Out On A Stock That I Have Sold Short D.D. Pallmer 12-23-2006  Re: Dividends I Paid Out On A Stock That I Have So... Phil Marti 12-25-2006  Re: Dividends I Paid Out On A Stock That I Have So... Bruce E. Cobern 12-25-2006  Re: Dividends I Paid Out On A Stock That I Have So... Rich Carreiro 12-28-2006  Re: Dividends I Paid Out On A Stock That I Have So... D.D. Palmer 12-28-2006
Posted by D.D. Pallmer on December 23, 2006, 1:27 am Please log in for more thread options How do I report dividends that I paid out on a stock that I have sold short? << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Phil Marti on December 25, 2006, 10:13 am Please log in for more thread options > How do I report dividends that I paid out on a stock that I > have sold short? Depending on the details, as investment interest or added basis when you cover the short. See "payments in lieu of dividends" in IRS Pub 550. -- Phil Marti Clarksburg, MD << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Bruce E. Cobern on December 25, 2006, 10:13 am Please log in for more thread options > How do I report dividends that I paid out on a stock that I > have sold short? I am reasonably certain that "short dividends" are reported as investment interest expense. -- Bruce E. Cobern, CPA mailto:bec@pipeline.com << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Rich Carreiro on December 28, 2006, 12:07 am Please log in for more thread options >> How do I report dividends that I paid out on a stock that I >> have sold short? > I am reasonably certain that "short dividends" are reported > as investment interest expense. According to IRS Pub 550: * If the short position is open for more than 45 days, you deduct the "short dividend" as investment interest on Sched A. * If the position is open for 45 days or less, you have to increase your basis in the short position by the amount of the "short dividend". You can't deduct it. -- Rich Carreiro rlcarr@animato.arlington.ma.us << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by D.D. Palmer on December 28, 2006, 8:15 pm Please log in for more thread options >>> How do I report dividends that I paid out on a stock that I >>> have sold short? >> I am reasonably certain that "short dividends" are reported >> as investment interest expense. > According to IRS Pub 550: > * If the short position is open for more than 45 days, you > deduct the "short dividend" as investment interest on > Sched A. > * If the position is open for 45 days or less, you > have to increase your basis in the short position > by the amount of the "short dividend". You can't > deduct it. Does the 45 days mean the total time the position is open, or does the 45 days mean the from the time I went short until the time the dividend was paid out by me? << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Similar Threads Posted Dividends paid on shares sold short March 20, 2008, 10:38 pm Re: K1 For shares sold short March 22, 2008, 12:02 am difference between adding short dividends to cost basis or investment interest January 22, 2008, 5:41 pm Dividends Paid After a Roth Conversion December 3, 2008, 11:31 am Any Alternative to stock "put" or "short against the box" June 23, 2006, 3:10 am How to handle stock options that were NOT exercised and sold @ a loss? 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