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Capital Gains Tax

Does a capital gains tax still apply if you sell your stock for no profit or loss. For example you invested 10 dollars in a stock that is worth 5 dollars; so you will have 2 shares. Then the stock rises to 10 dollars, so you sell 1 stock to cover your initial investment. Will the tax apply because the stock rose in value, or will it not apply because you sold for no profit?

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1 Reply
MaryK4
Expert Alumni

Capital Gains Tax

You would have a capital gain on the on the one share stock unit.  Your basis in each share would be $5 so if you sold for $10, your gain would be $5.  

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