short stock sale

[Bettie Cheek]

taxpayer received a 1099 showing proceeds for $10,000 for 2005. This was a short sale and is still open. They had share of this same stock but it was closed prior to this. How do I show this on the return. Thanks

[Matt Sova]

Short sale

The stock's were then sold for a loss, but you have to report the 1099-B anyway. So the sale price is 10k and the basis is 10k. Assume they sold the stock for a $2,000 loss. That loss is just suspended. The loss is now added to the basis of the new shares that were purchased.