difference between adding short dividends to cost basis or investment interest

Posted by removeps-groups@yahoo.com on January 22, 2008, 5:41 pm

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If you short a stock and it pays a dividend, and you held the short
position <=45 days (or is it <45 days) then you add the short dividend
to your cost basis. If you held >45 days then add the short dividend
to investment interest. Does it make a difference to the end result
-- which is the net taxable income?

Only thing I see is that if you don't itemize, then investment
interest is wasted. Investment interest is not subject to phaseout or
AMT. So is there any difference?

Thanks

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