Tax-aware long/short: how short dividends work
And a potential hiccup to keep in mind when transferring assets
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The Tax-Aware Long/Short Practitioner Group will meet on Day Two (May 29, 2026).
Berkin and Luck’s 2009 paper, Having Your Cake and Eating It Too: The Before and After Tax Efficiencies of an Extended Equity Mandate, was the first paper about tax-aware long/short I read.
If you’re getting up to speed on tax-aware long/short, here is a brief introduction.
This article is about how the dividends that strategies like 130/30, 250/150, etc. collect on long positions and pay on short positions are taxed at the federal and state levels, including a few infographics and some weirdness investors might need to keep in mind when transferring assets between custodians.
