This may seem like a total newbie question, but I've never had this situation before! I've always been flat going into a new year. I shorted 500 shares in December '03, covered 250 of it, and am still short the rest. My broker's 1099 shows the entire gross proceeds from all 500 shares was reported to the IRS. Does anyone know how I report this on my Schedule D? Thanks
A Google search on capital gains tax "short sale" turned up the answer... http://www.irs.gov/faqs/faq-kw203.html
Thanks Aaron. I had looked thru the Schedule D instructions on the IRS web site, but not the FAQs. I appreciate it!