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Author: blesto Big red star, 1000 posts Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 27822  
Subject: Re: DRIPs and taxes Date: 6/7/2012 7:57 PM
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You do sound like you have a dilemma.

Are you looking to sell some or all of your shares?
The real trick with DRIPs is maintaining detailed records. You should also go over the prospectus for your Particular plan. Plans do vary and have different tax consequences.

If you're having trouble collecting your records, contact your Plan Administrator and they may be able to help.

Anyways here's some info and links;

http://www.fairmark.com/capgain/basis/drip.htm
This is the last paragraph, more info at the link
Keeping records

Figuring out your basis and holding period on any particular dividend reinvestment is usually not too hard. But if you reinvest dividends over a number of years, it may be very difficult to reconstruct the basis of your shares unless you keep records as you go along. It's a good idea to set up and maintain a good system of records for your stocks even if you do not participate in a DRIP. If you do use a DRIP, keeping good records is truly a necessity.



http://www.amstock.com/shareholder/sh_tfaqs.asp
11)How do I compute the basis for stock I sold, when I received the stock over several years through a dividend reinvestment plan?

The basis of the stock you sold is the cost of the shares plus any adjustments, such as sales commissions. If you have not kept detailed records of your dividend reinvestments, you may be able to reconstruct those records with the help of public records from sources such as the media, your broker, or the company that issued the dividends. If you cannot specifically identify which shares were sold, you must use the first-in first-out rule. This means that you deem that you sold the oldest shares first, then the next oldest, then the next to the next oldest, until you have accounted for the number of shares in the sale. In order to establish the basis of these shares, you need to have kept adequate documentation of all your purchases, including those that were through the dividend reinvestment plan. You may not use an average cost basis. Only mutual fund shares may have an average cost basis.


One more link for good measure and some good info;
http://www.buyandhold.com/bh/en/resource_center/taxes/taxfaq...
This particular site seems to be sponsered by the Fool.

No matter how you slice it , though, you have some work to do. But don't let enormity of it intimidate you.
You can do it!

I hope this helps.

blesto
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