For most purposes, the tax law uses the trade date for both purchases and sales. For example, if you sell stock on December 31, you’ll report the gain or loss that year, even though the transaction will settle in January. Trade dates also govern in determining whether your holding period is short-term or long-term, in determining whether the wash sale rule applies, and in determining whether you have a qualified dividend.
You should be aware of a couple of exceptions:
When you close a short sale at a loss, the tax law treats the transaction as occurring on the settlement date. See Last Day to Sell.
If you hold more than one lot of shares and sell part of your holdings, you may want to identify the shares you’re selling. You can identif
