E.g., if I purchase stock A on 2020-10-30, loan it to my broker from 2021-02-01 to 2021-11-20 and sold it on 2021-12-01 making a capital gain of X USD, will that count as long-term or short-term capital gain?

This is just an example with random dates. I'm interested to know in the general case: if I loan securities to my broker, can this turn long-term capital gains/losses into short-term capital gains/losses?

1 Answer 1


Loaning your securities has nothing to do with capital gains. You buy the stock on date "X" and sell it on date "Y". The holding period is the time between "X" and "Y" and the capital gain/loss is determined by your purchase and sale price.

What can change is how your dividends are taxed if you receive any. The shorter who borrows your stock must pay you the amount of the dividend if he is short on the ex-dividend date. This is payment is payment-in-lieu and it will be taxed as ordinary income and you have lost qualified dividend status.


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