Short Sales Investment Killer Explains Capital Gains And Losses
In a short sales investment, your intention is to register profit by selling assets that you do not own, usually securities. Later, you will buy identical assets and return them to the lender.If the asset’s price declines, you will have profit because of paying less for the assets at the sale date. If the asset’s price rises, you will have to pay the difference between the price at the time you borrowed and the price at the time you actually bought them.
Short Sale Investment – Capital Gain Or Loss
Your profit becomes taxable when you deliver the securities you owe to the lender and close the sale.The loss or gain of capital on a short sales investment will be calculated considering the amount of time you held the securities you borrowed, before you closed the short sale. For example, you buy 10 securities from your brokerage firm and you hold them for more than a year. As the securities price goes up, you buy them and decide to return them immediately to your lender. In this case, the profit you might have registered is considered a capital gain on a short sale.There are particular rules regarding the capital gain or loss from securities, assets or stocks you held. This applies only if, at the moment you close the short sales, the property you return is identical with the property you held.Special rules apply, under certain circumstances, for gains and holding period.Since Joe Mastriano P.C. deals with the IRS every single day, and has been doing so for over 30 years, we know how to maximize your refund and lower your tax debt the legal way. Contact us today to setup your consultation. We will discuss your options, explain to you how to handle the situation and if necessary, we can manage the process for you. For more information about short sales investment strategies to reduce your taxes, call us now at 713-774-4467!