How Do I Report Open Short Positions At Year End ?

Prior to tax year 2012, a short sale was reported by your broker via Form 1099-B to the IRS in the year it was opened. If the short position was still open at year end, you had to attach a statement of explanation to your tax return to account for the discrepancy of the reported sale.

Beginning in tax year 2012, a short sale is reported by your broker via Form 1099-B to the IRS in the year it is closed. So now if the short position is still open at year end, you don't need to do anything.

From now on, simply include any short sale on your tax return in the year it is closed.

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