SIE practice questioneasyTrade Date vs Settlement Date
For tax purposes, when is a securities transaction generally considered to have occurred?
- ATrade date✓ Correct answer
- BRecord date
- CThe date funds clear the bank
- DSettlement date
Explanation
Why A — Trade date
For tax purposes, a securities transaction is generally recognized on the trade date, which is the date the order is executed, not the settlement date. This matters at year-end because a stock sold on December 31 counts as a current-year transaction even though settlement occurs in the following year.
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