No. of Recommendations: 1
It's important to keep good records of DRIP purchases! When you sell, you have to declare ALL the sales proceeds for tax purposes, but you can deduct the purchase cost and fees you spent to buy the stock. IF you have records of the purchases!

But that means you need to keep records of the purchases you makes for years ---- several decades perhaps.


I have a pretty good method for doing that which has worked well for me for decades.

I have an ACCO Model 50 two hole punch bought for a dollar or so at a thrift shop.

http://www.ebay.com/itm/Acco-Model-50-Black-Adjustable-2-Hol...

I also bought a package of ACCO 50 No 22 Paper Fasteners at an office supply store for a few bucks:

http://www.ebay.com/itm/50-BNIB-ACCO-22-PAPER-FASTENERS-2-CA...


I two hole punch a hanging file and insert the paper fastener. I attach an index tab with the name of the stock records contained in that file.

Each time I receive a record of a purchase, sale, stock split, acquisition or other tax related document, it gets two hole punched and added to the documents in the hanging file.

Any information of the DRIP plan, envelopes, coupons for making additional stock purchases or whatever also go in the file.

I keep a separate file for each stock.

It's as simple as that.

You really don't have to do anything else until you sell a stock. At that time you add up the amounts of all your purchases which are your basis in the stock and which you deduct when reporting the sale on your taxes.


Most stock purchase plans repeat the record of transactions as they accumulate during the year, so you can be a stickler and save only that record of transactions at year end and throw out the transaction by transaction records if you wish.


Anyone have a better method?



Seattle Pioneer
Print the post  

Announcements

Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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