Well, I am a CPA, but that does not mean I handled those PAAS and PAAS warrants in exchange for BAY.to correctly... Guess I did not read the fine print, if any, stating this was taxable as a ST gain... But do not present me with any facts in this regard, ignorance is bliss, and I do not want to amend the return...
What I do know is that I covered my PAAS short position with the BAY.to PAAS shares received (recognized this gain) and kept the warrants with under a US$1 basis (using post distribution pricing), and still have them... This remains my only exposure to silver shares and I will likely keep them for another 3 years (1 year before expiration), the IRS will get their gain then...
I also know that my gross proceeds reported agrees to the penny with the IRS 1099 for all my share sells, including PAAS/BAY.to. My experience as a CPA is that if your 1099 proceeds reported exactly match your tax return, you are less likely to get audited on Sched D transactions. If I was audited and if you were correct on the STCG treatment, even then it is nigh impossible the IRS agent would whip out the prospectus on BAY.to showing me this was a STCG (plus it is not a huge $ amount relative to other positions)..., the IRS agent would simply confirm the price that I paid for it and the price I sold it, and determine I reported accurately, IMO. FWIW, I reconcile my total share purchases and sales to the penny each year, and given the 200+ transactions each year I believe the IRS would be favorably impressed with this record keeping...
Just my opinion...
News 
Market Data 
Discover 
