Direct Stock Investing and Taxes
In This Chapter
• Taxable items
• Reporting differences
• Calculating capital gains
• Tax strategies
Investing through DRIPs and DSPs can complicate your taxes. If you’ve invested using mutual funds, you will find some similarities in what you must report to the IRS each year and what records you must keep to report the cost basis of your investments. If you have not done this kind of reporting before, you’ll need to start developing new recordkeeping habits.
In this chapter, we explore the nitty-gritty of the tax rules as they apply to DRIPs and DSPs. Then we look at the differences in how DRIP companies handle transactions and how they can affect your taxes. Finally, we discuss some additional ...