Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
Scenario 1

1. Bought 100 shares of ABC Company @ $10/share for total of $1,000
2. ABC's 100 shares pay a dividend of $30, reinvested at @ $15/share
3. Bought 50 shares of ABC Company @ $20/share for a total of $1,000
4. Sold all 152 shares of ABC Company at $30/share for $4,560.

Is my cost basis $2,000 or do I need to account for the dividend reinvestment as well?

You could have spent those dividends on anything you wanted. You chose to invest that capital in ABC Company stock, so it increases your basis.

Vickifool -- cherry-picking the easy question.
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
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.
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.