In article <d40c3a5f-4812-40ba-ba0d-00ca9f988115[at]e10g2000prf.googlegroups.com> ,
removeps-groups[at]yahoo.com <removeps-groups[at]yahoo.com> wrote:
- quote -


This is all described in http://www.irs.gov/pub/irs-prior/p550--2006.pdf
Page 55 under Payments in lieu of dividends.


If you held the short position open more than 45 days then you
can take an itemized investmment interest deduction.


But if the position was held open 45 days or less you capitalize
the in lieu of dividends amount into the cost of the stock.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 4, 11:58*am, Rich Carreiro <rlc-n...[at]rlcarr.com> wrote:
- quote -

I've always reported it as investment interest.line A13. This makes
it deductible, free of the itemized deduction phaseout, and free of
AMT.

An investment expense would I think be line A22. This includes things
such as monthly and quarterly fees at your brokerage company, payments
to a financial advisor to manage your money, subscriptions to
investment and money magazines. Only total expenses above 2% of your
AGI are deductible (though you add unreimbursed job expenses and tax
preparation fees to the total expenses), and it is subject to the
itemized deduction phaseout and is not allowed under AMT.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Daniel David Palmer" <ddpalmer[at]chironet.com> writes:

- quote -

No.

The only reason you had to report on your 2006 return was so that
the IRS wouldn't try to tax the short-sale proceeds. But since
there were no short-sale proceeds from the position in 2007,
there's nothing to report.

- quote -

Correct.

- quote -

Not directly. It's an investment expense, going on Sched A. You
can't directly offset it against dividends.

--
Rich Carreiro rlc-news[at]rlcarr.com

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I have a big open short sale position from November 2006. On my 2006 tax
return I reported the sale proceeds and noted it as an "open short sale". I
did NOT cover the short during 2007. Do I need to report the "still open
short sale from 2006" or can it just wait until the year that I actually
cover the sale?

Also, I made some "payments in lieu of dividends" on that short sale. Can I
offset some actual dividends received with these dividend payments made?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >