Submitted by bnabin51 t3_11co35x in wallstreetbets
bnabin51 OP t1_ja40x8x wrote
Reply to comment by VisualMod in Tax offset on paid dividends by bnabin51
What about the $100 I paid for the dividend?
SodiumEthylXanate t1_ja42uiy wrote
Depends on which country you live in, but dividend income tax can be completely separate to capital gains / other income tax
bnabin51 OP t1_ja42zqe wrote
I live in the US.
Telinger t1_ja430ad wrote
If you don't own the shares then you don't get the dividends. An option is a right to purchase or sell, not ownership of the underlying stock.
In your case you ignore the dividends since you never recieved it.
Unknownirish t1_ja4cly5 wrote
Sounds to me a dividend hit his account during his short position (which was probably IDK, OP! a put position), and he likely exercised his position his way.
bnabin51 OP t1_ja5f74y wrote
I had short calls (without shares) before ex-dividend and the call owner exercised them before ex-dividend, leading me to be in short positions of stocks. So, I had to pay dividends to the person from whom I borrowed the shares. https://www.reddit.com/r/stocks/comments/11clbzq/is_the_dividend_paid_on_short_positions_tax/
Unknownirish t1_ja5fqmg wrote
Dammmmmn you keeping those L's or can you share
bnabin51 OP t1_ja5gbc6 wrote
Luckily, I won the overall trade.
5 months back, this had happened:
https://www.reddit.com/r/thetagang/comments/xftvgf/help_8_out_of_10_short_legs_of_calendar_spread/
Unknownirish t1_ja5gmqo wrote
So whatcha saying there's hope for MP puts expiring March 17 on sts Patty day lol
Telinger t1_ja4if0m wrote
That's only possible if he owns the shares on the ex dividend date. An option is not share ownership.
Unknownirish t1_ja4ijs2 wrote
It is possible idk OP should just be happy lol that he has a profit to pay taxes lol
Telinger t1_ja4jcir wrote
If he bought a put and was assigned he would own the stock. If he then held the stock through the ex-dividend date then he would get the dividends. However, this is not how I read OP's post.
no_simpsons t1_ja53jsk wrote
if you short the shares, you pay the dividend. it could be different line items on the 1099, capital gain and investment interest expense, which theoretically offset each other, but technically are in different buckets.
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