If you contribute to a non-retirement brokerage account and receive dividends you may be required to pay income taxes even if you do not withdraw from the account. Dividends that are reinvested will be taxed in the year received but will increase the cost basis of the security or mutual fund that you purchased and thereby reduce the amount of the gain when you sell the position. When you sell a position in a non-retirement brokerage account you will either have a gain or a loss when you compare the adjusted cost basis to the proceeds of the sale.
Hope this helps answer your question.
AnthonyC_CPA
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