What is the meant by Selling Short Against the Box (Constructive Sale)?
The reverse of the Wash Sale rule is known as the "Constructive Sale" rule that prevents a taxpayer from locking in the appreciation on a security without recognizing any taxable gain by selling an identical security short.
The two positions are deemed to be a constructive sale and the taxpayer must realize gain as if the appreciated security was sold for its fair market value on the date of the short sale, thereby preventing the taxpayer from deferring the capital gains to a future tax year.
An exception to this rule allows the taxpayer to close the short sale within 30 days after the end of the tax year if the taxpayer keeps the appreciated position open and at risk for at least 60 days following the close of the short sale. Since closing the short sale is based on the delivery date, the taxpayer will actually need to close the short sale earlier so to leave enough time to have the shares delivered within the 30 days.