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Tax Planning/my q. of april 17 re divs. paid on short sale.


I am still confused because the quote from 550 doesn't seem to address my question.

I understand I CAN'T deduct payments unless short is held 45 days and that and that I MUST increase the basis if the short is held less than 45 days.

I want to increase the basis on position held more than 45 days (instead of deducting payments) but it does not seem like 550 addresses that ... It never says I can't increase the basis.

In other words I want to treat a position held more than 45 days the way I am required to treat a position held less than 45 days.

Thanks again

Just as an aside, IRS "Publications" are not considered "substantial authority" for a position you take on a tax return.  There are many other items that count as such.  For example, legislative intent, IR Code, Revenue Rulings, Revenue Procedures, etc.

Here are a few references that hopefully address your questions:

I think this part of the tax code is more on point for you ->

Hope this clarifies this for you.

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

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