You're correct that the transaction you describe is not a short sale. Therefore, don't characterize this transaction on your return as a short sale. The important, and overriding goal, is to have an accurate tax return. The issue you describe is essentially one of constructive receipt of income versus actual receipt of income.
Under the cash method, you not only report income in the year it is actually received, you also report income in the year it is constructively received.
Constructive receipt refers to income that you do not have physical possession of but it has been made available to you without restriction. In other words, you have constructive receipt of income when you have control over such income.
Based on the facts that you describe, it does not appear that you had actual receipt of the funds from the sale of the shares, but it also does not appear that you had constructive receipt either. In such circumstance, it seems reasonable to report the income in 2021, rather than amending your 2020 return to report the income in 2020. Thus, include the October 2021 date as the date of sale (the actual day in October 2021 could be the day you received the check). Keep your records, such as a copy of the check, to demonstrate that while the 1099-B shows a December 2020 date of sale, based on actual and constructive receipt of income principles, it was more appropriate to use an October 2021 date of sale.
@ask4babs
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
