Do I use the settlement date or trade date for income tax purposes?

[jenhogan1976]

I sold some stock at the end of 2014. The "trade date" is listed as Dec 29, 2014, the "settlement date" is listed as Jan 2, 2015. Do I claim the capital gains on my 2014 taxes, or my 2015 taxes? I've seen both responses when I google it.

[fuzzy · Accepted solution]

You will use the settlement date.  In your case you will report this disposition on you 2015 return.  For more info please see http://www.taxtips.ca/personaltax/investing/taxtreatment/tradeandsettlement.htm

[jcherner]

You are wrong according to TD Ameritrade. They write: Thank you for contacting TD Ameritrade. In regards to your inquiry, ownership of a long position begins when you make the purchase of those shares, therefore, the actual trade date is used in determining the holding period for capital gains and losses.  You may reference IRS publication 550 for additional information.

[redfeather999]

Fuzzy cites a Canadian source.  For US taxpayers, it's the trade date unless a short sale is involved.  This is from IRS 2017 Instructions for Form 8949: "Use the trade date for stocks and bonds traded on an exchange or over-the-counter market. For a short sale, enter the date you delivered the property to the broker or lender to close the short sale. If you received a Form 1099-B (or substitute statement), box 1c may help you determine when you sold or disposed of the property."