I'm begining to look into purchasing some stocks, and am wondering how the taxation issues effect any increases in the price of a stock. For example:If i buy $100 of stock A, and at the end of the given tax year my original investment is now worth $150, do I pay tax on the increase of $50? My understanding is I only pay taxes if I sell the stock. Any information (or links to information) would be greatly appreciated. I've figured out IRA's and have gotten into a Roth. Now i'm trying to venture into regular securities. Again, thanks for any help.allgoodpeople
You only pay the tax on the $50 if it is a realized gain, meaning you sold the stock and made a gain. Then depending on how long you held it and what your tax bracket is determines your tax.However if you bought that 100 stock and it gave you a cash dividend then that is taxable when you receive it.
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