Dividend reinvestment stock basis

2020-01-24 08:52

Cost Basis. When you sell shares of stock, you deduct your cost basis from the proceeds of the sale. Cost basis is the total amount of money invested, including broker's commissions and other transaction costs. The difference between cost basis and sale proceeds is your taxable gain or deductible loss.All you need are the purchase and sale dates and shares of the stock or mutual fund and the system has the rest of the information, such as corporate actions (splits, spinoffs, etc), pricing, and dividends and it also will apply the appropriate IRS rules for inherited and gifted shares. dividend reinvestment stock basis

The shares that you buy through dividend reinvestment have a basis equal to the amount of dividends you gave up to obtain them. As a result, over time, your total cost basis in your position will rise. Eventually, when you sell your shares, your capital gain will be the difference between the proceeds from the sale and your cost basis in the shares.

How can the answer be improved? The shares that you buy through dividend reinvestment have a basis equal to the amount of dividends you gave up to obtain them. As a result, over time, your total cost basis in your position will rise. Eventually, when you sell your shares, your capital gain will be the difference between the proceeds from the sale and your cost basis in the shares. dividend reinvestment stock basis Dividends Paid in Stock. Sometimes you may receive additional shares of stock in a company you already own as a stock dividend instead of receiving a cash dividend. When it is a small percentage, usually less than ten percent, it is often referred to as a stock dividend rather than a stock split.

Adding up all of your investments. Generally, you subtract the price you paid for an asset from its sale price to arrive at your taxable basis. However, reinvested earnings affect basis. Heres how it works. You bought 100 shares of a stock for 1, 000 in 2008, and that year had dividends of 100 reinvested. dividend reinvestment stock basis

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