Short Sales
Gains and losses of short sales are treated similarly to gains and losses of other positions. The key differences include:
- A loss is not deductible until the replacing shares have been delivered
- Gains and losses are reported in the year during which the position closes
- Gains and losses are generally treated as short-term regardless of the holding period
Because short sales can offer a more complex tax situation, it's important to discuss your specific details with a tax professional.