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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?

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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

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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.

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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.

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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/

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Unknownirish t1_ja5fqmg wrote

Dammmmmn you keeping those L's or can you share

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Telinger t1_ja4if0m wrote

That's only possible if he owns the shares on the ex dividend date. An option is not share ownership.

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Unknownirish t1_ja4ijs2 wrote

It is possible idk OP should just be happy lol that he has a profit to pay taxes lol

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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.

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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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