"vahania" <vahania63[at]yahoo.com> wrote:

- quote -

I do a lot of short selling and the numbers never agree on
my return. On your brokerage filing it should say "SS" for
short sale. However, if the amounts do not agree, I always
put a signed statement in with my return explaining it --
Otherwise it may raise a red flag and audit for you. Even if
your short sales are clean it may draw IRS attention to
something else.

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It is my understanding that the brokerage companies will
send to IRS in the end of the year the form with the list of
'sell' transactions only. When I file my tax return I should
describe every transaction that led to each 'sell' so that
in end the sum of all 'sell' transactions on the IRS list
will equal to all 'sell' transactions on my return. But what
if I have a short sale that I haven't covered this year yet.
It means that this sale will be on IRS list but it will not
be on my return since I didn't cover this short sale.
Therefore, there will be a mismatch between my return and
the form that was sent to IRS. Is this a problem and if yes
what I am supposed to do?

Thanks in advance,
Val

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