IRS and tax loss......The trade date is what matte

IRS and tax loss......The trade date is what matters. This is the day the transaction took place on the stock exchange. It doesn’t matter if your transactions settle in the following year.
However, the exception is short sales. If you’re closing the short position at a profit, the trade date controls the timing for tax purposes. In other words, we use the same rule here as when you’re selling shares you own.
If you’re closing the short position at a loss, however, the settlement date will control. A loss requires delivery of shares which can't be done until settlement occurs.