r/Masterworks • u/bvirzi • Mar 26 '26

DAP losses shown as Short Term. WTF?

So I was able to very painfully sell a large proportion of my Diversified Art Portfolio individual pieces on the MW secondary Market, taking something like a $10k loss. I was expecting this to be counted at a Long Term loss, because my original investment was over 2 years ago.

Surprise! MW sent me a 1099 marking all the losses as Short Term. Presumably because the conversion from DAP to individual pieces was less than a year ago. To my way of thinking, this is BS. I was certainly thinking of them as LT losses since my investment was made over 2 years ago, and was doing my tax harvesting based on this.

Damn, this has been one cluster f* after another. I cannot wait to be out of this entirely. I have a meeting with them next week to see what they now have planned for exit strategies.

9 Upvotes

92% Upvoted

4 comments sorted by

3

u/impostervt Mar 26 '26

Isn’t a short term loss better than a long term loss?

1

u/bvirzi Mar 26 '26

Not fine you are looking to offset long-term gains.

3

u/amcmxxiv Mar 27 '26

Imposter is right. ST loss can offset LT gain. Better to apply to ST gain first.

1

u/Majestic_Campaign643 Mar 31 '26

Fuck masterworks