Question

TT confused re: Options trading - specifically selling a stock short which makes the date acquired come AFTER the date sold - error: "Date acquired is after date sold"

Forum|Forum|4 years ago
February 12, 2022
2 replies
0 views

How do I fix this?

TurboTax Live Premier Online

When having difficulty entering dates and TurboTax not accepting what you are entering for the Acquisition Date you can use the word "Various". On each of these transactions where the dates are not being accepted by TurboTax go back and use the word "Various" for the acquisition date. When using the word "Various" you will need to indicate whether it is a long-term or short-term transaction.

A short-term transaction is anything that has been held for less than a year.

A long-term transaction is anything that has been held for more than a year.

Rick19744

Employee

This area is way more complicated than just entering "var".

There are many dates and positions to understand:

is this a covered short sale (one in which you own identical securities)?
is this an uncovered short sale?
What dates are we talking about?

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

fanfare

Employee

If you enter into a closing transaction by paying an amount equal to the value of the put or call at the time of the payment, the difference between the amount you pay and the amount you receive for the put or call is a short-term capital gain or loss.

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In order to close a short you must go to the market and acquire some securities, in this case, some options.

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 whomever 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.

If an option that was granted (written) expired, enter the expiration date in column (b) and enter “Expired” in column (e).

From this you can see that a short is always a short term capital gain or loss, no matter how long you are short.