Is there a tutorial in Quicken or Turbotax or somewhere else on the web that explains how to calculate the taxes on closing out a DRIP? I know I have heard the term “cost basis” but I am not sure if that means I have to calculate every stock purchase. I expect to keep things easy by selling all my shares in one DRIP at one time. So for example, I make monthly DRIP purchases at $100 for 6 years. So I would have 72 monthly purchases and 24 quarterly purchases = 96 purchases. Now obviously some of these were held for over 5 years, some 1to 5 years and some less than one year so I assume there would be 3 different capital gains tax rates? And there was a split a couple years back; I'm not sure what to do with that. So six years ago I bought $100 worth of stock @$40 a share (2.5 shares), it is now $45 a share after a 2 for 1 split 2 years ago. I assume that the real value of my first buy would now be $90 a share for a capital gains of $95-$40= $55 X 2.5 shares = $137.50 X 18% tax rate.. I suppose my initial $25 DRIP set up fee would reduce the first transaction and only minor costs I think 5 cents a share is charged as a sales cost by the company. And I would need to do this calculation 96 times? It does sound complicated to a non accountant like me although its just a lot of arithmetic. Is there an easier way to do this? I have 6 DRIPS and expect to keep some 10 years or more but that is a lot of calculations. Am I missing something?
I have sold some of my drips. What I did was I added up the number of shares that were long term. Then you take what you paid for those shares and what it was worth and put it on the tax form. When you get to the dates you write various long. On the line where you write the stock you write something like 105 or how ever many shares you sold that were long term and the name of the stock.You do the same thing for short term and the extra long term. Quicken will divide the stock up into long and short term so it makes it easy for you. Print it out so you have a record. Thats all there is to it. It really doesn't take that long.Hope this helps and was clear enough for you.Ginny
I think I am following you. (I am new to all this , I have sold all of one lot of stock in my life and that was through a broker.) So I would have 3 entries on my tax form, makes sense. And to get those figures I need to figure out how much I made on each lot (monthly purchases & dividend "purchases")and add these all together (Some would be above and some below the sale price) for each of the tax periods? And I have a split in there. Still seems comlicated but better in needing only 3 entries on the tax form.
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