I have a plan which I hope will simplify tax details when the time comes to sell my DRIPs. I expect I will sell all my shares in a given company at one time. So after say ten years I expect I will have three groups of shares, those over 5 years for the 18% capital gains tax level, those I have held less than 5 years but more than one for the 20% capital gains tax level and those held less than a year which would be taxed as current income. I would average the cost of shares in each period and deduct that from the sale price to get the taxable gains. Another even simpler approach that may work because I really have a 10 to 20 year window for the investments, is to stop buying shares for the last 5 years and have dividends paid out in cash (no longer reinvested) but then when I want to sell I would average the cost of all the shares as one lot and deduct that from the sale price to get the taxable gains. Is this realistic or am I missing something? I like my DRIPS since dollar cost averaging matches my income flow but I would like to avoid a CPA having to figure out the taxes.
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