Actually you are both correct. Brokerage firms use settlement date to report sales for year end and accountants use the last day of the year for tax purposes.
Remember that when you buy and sell stocks and mutual funds, the important date for tax purposes is the trade date -- not the settlement date. The trade date fixes both your holding period (for short-term and long-term purposes), and the year in which the sale must be reported. Many people are still under the mistaken impression that the "settlement" date controls the trade. It's simply not true. When planning your tax moves for stock and mutual fund transactions, make sure to focus on the trade date.http://www.fool.com/taxes/2000/taxes001124.htm
Securities traded on an established market. For securities traded on an established securities market, your holding period begins the day after the trade date you bought the securities, and ends on the trade date you sold them.
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