Constructive Sale of Stock


W

W

If you go long a stock and then later short the stock and keep the long
position, the IRS treats this as a constructive sale and you are taxed on
the gain that existed at the time of the short sale. What if you keep
those long and short positions for a full year from the date of the short
sale? Are the additional gains on one side of the position treated as long
term capital gains?
 
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A

Arthur Kamlet

If you go long a stock and then later short the stock and keep the long
position, the IRS treats this as a constructive sale and you are taxed on
the gain that existed at the time of the short sale. What if you keep
those long and short positions for a full year from the date of the short
sale? Are the additional gains on one side of the position treated as long
term capital gains?
And when did the holding period of the short sale begin?
 

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