Tax Tips for Procrastinators
The rule says that 60% of the gain or loss is long term and 40% is short term, regardless of the actual time it's held.
In this case, the short follows the rules of the underlying long position. So the 60/40 rule would apply here as well.
Last-Minute Tax Reminders
Whether you file your 2006 tax return or an extension, it doesn't really matter. You just need to do something -- unless you don't owe taxes. But if you do, and Uncle Sam doesn't receive some correspondence from you by midnight April 17, then you'll get smacked with a late filing penalty that rakes in 5% per month based on the amount of tax you didn't pay on time. And that can add up fast.
And it's OK to throw in the towel and extend (I certainly won't think less of you). You'll just need to file Form 4868 -- Application for Automatic Extension of Time to File U.S. Individual Tax Return.The good news is that you'll buy yourself an automatic six months. So you're return will then be due Oct. 16. The bad news is that you probably still have to complete your tax return to properly fill out Form 4868. That's because Form 4868 asks for two numbers from your federal return, Form 1040. The first number is your total tax liability, which is line 63, and the second number is your total payments, which is line 71. So you'll need fill in all the other lines on the form to calculate those two.
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