"Short sale" is selling securities you don't have in the hope of the price falling.  It is a type of transaction that generally results in short term gain/loss but it is not the same as short term investment.

Whether your client received the money or not does not make a difference.  All the gains and losses still need to be reported as taxable income because your client already has constructive receipt and can do with it as he/she wishes without any restrictions (e.g. reinvesting in other securities).