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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121430  
Subject: Re: Easing tax-calculations for DRIP Date: 12/30/1998 2:58 PM
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[[I am about to start my first DRIP, and was reading about all the tax calculations
one needs to do for DRIPs.]]

Right...they can get a bit messy

[[ Does it make sense to choose not to re-invest the dividends, and does that save
oneself a lot of hassle during tax-time?]]

In may save you some hassle, but it really defeats the purpose of a DRIP investment.

[[ As I see it, re-investing dividends is just
like sending in some extra cash every month. If I am doing that anyway, then
why not have the dividend sent to me and thus avoid the hassle of dealing with
fractional shares, and purchases at odd times, etc.]]

It's not that much of a hassle. And if you are sending in addinional money anyway, you will still have the same recordkeeping hassle. It's not difficult, just a bit time consuming. But you can set up your own spreadsheet and track the purchases pretty easily.

And the hassle doesn't really come when you buy, but when you sell. When you sell out your DRIP stock, if you sell it ALL at one time, many of your tax reporting hassles go away.

Some time it takes work to get rewards.

TMF Taxes
Roy
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