Tax: Short EndOfYear, But Closed Next Year?

Discussion in 'Taxes and Accounting' started by igum, Feb 24, 2006.

  1. igum


    Help, IRS is reporting my 1099 doesn't match with what I report. I figured out its due to a short I put on in Dec 04, but bought back in Jan 05, for a small profit.

    So what do I tell the IRS? They say I owe the proceeds from the sale. But for 2004, I never closed the short so there was no gain. Also I only gained on small cap gains, not the proceeds of the entire trade!!

    I did not own any identical shares than this.

    So should what should I tell the IRS? Would I have to pay the tax for this as a 2004 or 2005 tax item?
  2. Ebo


    Just enter the trade on your 2005 Schedule D. The Proceeds were included on your 2004 1099 since the sale occured first.
    The taxable event occured in 2005.