1A. Briefly describe the three parties involved in a short sale?

1B. An investor own 500 shares of stock that has been held for a 5 years that has a basis of $20,000. The investor also owns 500 shares which have been held for 3 months with a basis of $40,000. At that time the investor sells short 500 shares of stock for $27,500. If the investor closed the short sale by delivering the shares held for 5 years what is the amount of the gain/loss Is it long term or short term? Why? What would happen if the investor delivered the shares held for3 months?

1C. An investor buys 1,000 shares of a mutual fund on December 3, 2013 for a total cost of $50,000. On December 23, 2013 the investor received a long-term capital gain dividend on those shares of $3,000. On February 14, 2014 the investor sells the shares for $48,000. What is the amount of the investors gain or loss on the sale? What is the character of the gain/loss?

1D. An investor buys 1,000 shares of Corp ABC on Jan. 31 2018. ABC will announce its quarterly earnings on May 15, 2018. The investor is nervous because it is afraid ABC will miss the earnings forecast and will decline in price. The investor buys 10 puts on ABC on May 14. The earnings actually exceeded investors expectations and ABC goes way up in value. The investor sells the puts on May 16. On February 15, 2019, the investor sells the ABC stock for a substantial gain. What is the nature of the gain for federal income tax purposes?