Question

How do I record a short sale on Turbo Tax for which borrowed stock was sold and then acquired to cover the call (i.e. the acquisition date is after the sale date)?

Forum|Forum|5 years ago
June 17, 2020
1 reply
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Turbo tax tells me that the date acquired cannot be after the date sold.

TurboTax Self Employed Online

A

Anonymous

use the same acquired and sales date which will force it to short term. for the date use the date that the call was exercised. the point is a short sale is short term capital gain.

strange in the desktop version the date acquired can be after the date sold and the error check doesn't bounce it.

fanfare

Employee

In order to close a short you must go to the market and acquire some securities.

The acquired date is the date you closed the short sale.
For Stocks, the disposed date is two business days later (settlement).
Options settle in one day.

Note to those for whom it is not obvious: Date Acquired and Date Disposed refer to Columns (b) and (c) on Form 8949 that you will report to the IRS.
Your trade date is the date you closed the position and goes in (b). Settlement date must be calculated taking into account weekends and market holidays.

D

D_ONEILL

Yes to close a short sale you buy securities. Other than that your response is not at all correct, but valiant attempt.

A short sale has acquisition and disposal dates swapped from a long sale, that is all. The date disposed is always on or before the date acquired because you are selling the item and then purchasing it to cover later. It has little to nothing to do with weekends or 1-3 day waiting periods.

Edit: Reading the form instructions indicates that I am incorrect, the date for short sale in column b will be the date of the buy-to-close transaction and in column c would be the actual delivery date of the purchased security.