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Shorting against the box

Shorting against the box Definition

A hedging technique used by investors to protect a profit until a later tax year. Essential this involves having a long position in a security and shorting an equal number of shares in that same security. The Taxpayer Relief Act of 1997, essentially eliminated the use of “selling short against the box” for tax purposes, due to the fact that this strategy now creates a taxable event.

RELATED CATEGORIES
Taxes





Related Links

TheStreet.com - Hedging Technique Opens a Pandora's Box of Tax Concerns



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