Assigning adjustment code L or S to an open leg of a trade will force the holding period of the trade as either Long-Term (code L) or Short-Term (code S), regardless of the actual number of days the position was held. This adjustment will be reflected in the Gains & Losses Report and Form 8949.
How and when might this code be used? In certain scenarios a taxpayer may be required to treat a position as either long-term or short-term because of tax laws. For example: the beneficiary of inherited stock typically must report any capital gains/losses as long-term, regardless of when the stock was originally purchased. The TradeLog support team may also recommend this code be used in other unique situations where the holding period must be adjusted for tax reporting. Please consult with a tax advisor regarding your specific situation and whether a trade's holding period should be adjusted.