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New Member
posted Jun 23, 2020 11:10:21 AM

Do I have to pay capital gains tax on my Edward jones accounts when I didn't withdraw any money?

when are capital gains taxed?

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4 Replies
Level 15
Jun 23, 2020 11:28:25 AM

Capital gains are taxed when you sell an investment. It doesn't matter whether you leave the money from the sale in the brokerage account, reinvest it, or withdraw it. It's the sale that triggers the tax.


At the end of the year Edward Jones will send you a statement or report showing your sales during the year. The statement is a substitute for IRS Form 1099-B. You will use the information from that statement to report your investment sales on your tax return.

 

Expert Alumni
Jun 23, 2020 11:28:59 AM

If you did not sell any stocks from your brokerage account, there is nothing to report and there is no capital gains. Withdrawing money from your individual brokerage account is not a reportable event.

 

Capital gains are taxed when they are realized, i.e. when you sell stocks at a gain.

Level 15
Jun 23, 2020 11:39:19 AM

You might have some capital gains reported in your dividends on the 1099Div.  Those are taxable.

Level 15
Jun 23, 2020 3:14:19 PM

If you own individual stocks, bonds or other securities, you only have a gain when you sell the security for more than you paid for it.  If you sell stocks, that gain will be taxed regardless of whether you cash out the money or reinvest it.  But you don't owe anything if you just hold the stocks, even if they go up in value.  You only have a gain when you sell and make the gain "real" ("realizing the gain").   The stock may also pay dividends during the year which are taxable when paid, even if you reinvest them in new shares.

 

If you own a mutual fund, then you may have a gain if the fund manager sells stocks within the fund, even if you don't sell your shares.  This will be true whether the fund manager sends you the profit from the stock or reinvests it in other stocks.  The stocks in the mutual fund may also pay dividends, which are taxable to you even if the fund manager reinvests them for you.  However, these types of trade increases your basis in the investment so, while you may pay some gains tax each year, you will then pay less gains tax when you sell your shares.  

 

 

All this information pertains to investments that are NOT part of a tax-advantaged retirement scheme (such as an IRA).  If your investments are in a tax-advantaged retirement account, the rules for those accounts will apply instead.