David Posted June 11, 2009 Report Share Posted June 11, 2009 I am getting a message that I have to paper file a 1040 because Sch D includes some short sales. What is the problem? This doesn't make sense. Have any of you been able to work around this? All of the short sales happen to be short term gains or losses anyway. Instead of putting code 14 "short sales" for the transaction type, would it be a problem to use code 1 "non-business gain or loss"? Or will this raise a red flag with the IRS since the 1099B indicates short sale? Thanks. Quote Link to comment Share on other sites More sharing options...
jainen Posted June 12, 2009 Report Share Posted June 12, 2009 >>will this raise a red flag with the IRS since the 1099B indicates short sale?<< Although the full broker statement may provide details, the actual 1099B itself only shows sales proceeds. Furthermore, the "transaction type" is simply an internal software check, not a part of the final Schedule D. Any kind of work around that gives the desired result should be acceptable. But something is wrong, and short sales are so common that I'd guess it's more likely your data entry than a software bug. Particularly check the dates; they are always confusing when you sell before you buy. Quote Link to comment Share on other sites More sharing options...
David Posted June 12, 2009 Author Report Share Posted June 12, 2009 All of the dates acquired are before the dates sold and the data entry is exactly per the broker detail information. Also, all are short term gains or losses. Have you had short sales before and were able to e-file the return? Did you enter the short sale code 14 or leave the code as non-business gain or loss? Is my only option to leave the transaction type as code 1? It doesn't make sense that there is a transaction type code for short sale but the return can't be e-filed if you use it. Thanks for your help. Quote Link to comment Share on other sites More sharing options...
jainen Posted June 12, 2009 Report Share Posted June 12, 2009 >>the dates acquired are before the dates sold<< BINGO! Quote Link to comment Share on other sites More sharing options...
Joel Posted June 12, 2009 Report Share Posted June 12, 2009 David, If the date acquired is before the date sold it is not a short sale!!!! It may be a a short term gain or loss because the duration was less than one year, but it is a regular stock sale. I believe the broker statement reported the sales as short term not short sales. Quote Link to comment Share on other sites More sharing options...
David Posted June 12, 2009 Author Report Share Posted June 12, 2009 David, If the date acquired is before the date sold it is not a short sale!!!! It may be a a short term gain or loss because the duration was less than one year, but it is a regular stock sale. I believe the broker statement reported the sales as short term not short sales. Well, that is exactly how the 1099-B detail lists it and it does have a notation stating that it is a short sale. Thanks everyone for you input. I will simply change the type as a regular sale. Quote Link to comment Share on other sites More sharing options...
joelgilb Posted June 12, 2009 Report Share Posted June 12, 2009 For your reference: Note that 1099B's do not report short sales and that all brokerage statements show short sales separately and indicate that these transactions are not being reported to IRS. Quote Link to comment Share on other sites More sharing options...
taxtrio Posted June 13, 2009 Report Share Posted June 13, 2009 Are you sure you don't mean a "wash sale". Wash sales are often noted by the broker in their detail of gains and losses... Taxtrio Quote Link to comment Share on other sites More sharing options...
joelgilb Posted June 15, 2009 Report Share Posted June 15, 2009 Are you sure you don't mean a "wash sale". Wash sales are often noted by the broker in their detail of gains and losses... Taxtrio No I do mean "Short Sales" are not on the 1099B but on the detail and are not reported to the IRS Quote Link to comment Share on other sites More sharing options...
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