bnabin51
bnabin51 OP t1_ja5ic1p wrote
Reply to comment by chinnick967 in Tax offset on paid dividends by bnabin51
Then who pays the dividend to the stock lender?
bnabin51 OP t1_ja5hy0n wrote
Reply to comment by chinnick967 in Tax offset on paid dividends by bnabin51
Sorry if I explained it incorrectly. I did not receive a dividend. To receive a dividend, I need to be in a long position. However, I was in a short position.
bnabin51 OP t1_ja5gkx4 wrote
Reply to comment by chinnick967 in Tax offset on paid dividends by bnabin51
From what I have understood so far, if I shorted stock, I need to borrow the shares from someone else. The company pays dividends to the one who bought from me. However, I need to pay the person from whom I borrowed the shares, don't I?
bnabin51 OP t1_ja5gbc6 wrote
Reply to comment by Unknownirish in Tax offset on paid dividends by bnabin51
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/
bnabin51 OP t1_ja5f74y wrote
Reply to comment by Unknownirish in Tax offset on paid dividends by bnabin51
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/
bnabin51 OP t1_ja496bc wrote
Reply to comment by emielbo2 in Tax offset on paid dividends by bnabin51
Got it. Thank you.
bnabin51 OP t1_ja48a3c wrote
Reply to comment by emielbo2 in Tax offset on paid dividends by bnabin51
That's what I thought too, but this happened: https://www.reddit.com/r/stocks/comments/11clbzq/is_the_dividend_paid_on_short_positions_tax/
bnabin51 OP t1_ja42zqe wrote
Reply to comment by SodiumEthylXanate in Tax offset on paid dividends by bnabin51
I live in the US.
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?
bnabin51 OP t1_ja5j3ik wrote
Reply to comment by chinnick967 in Tax offset on paid dividends by bnabin51
I don't think this sounds reasonable.
Suppose a company has a total of 1000 shares and I own all of them. If you borrowed them from me and sold them to Elon Musk. Does the company pay dividends to both me and Elon Musk?