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L
Lava24
February 23, 2025
Question

Dividends on short sale

  • February 23, 2025
  • 1 reply
  • 0 views

If I receive $100,000 in dividends on a stock I have sold short, will taking the $100,000 in interest expense totally offset each other?

    1 reply

    PatriciaV
    PatriciaV
    Employee
    March 2, 2025

    Theoretically, the income is offset by the expense. Dividends are reported on Form 1040 Line 3. Investment Interest Expense is reported on Schedule A and may be limited. You may wish to enter this in TurboTax, then review Form 4952, Schedule A and the resulting taxable income on Form 1040.

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