UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next
Author: yakers Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 27818  
Subject: Re: Q: Bookkeeping of DRIPs and IRS. Date: 1/23/2004 1:11 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
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.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement