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jhpatt0
New Member

How is sale of stock from exchange and reinvested recorded on taxes from 1099b?

How do you enter non-covered reinvested sales from the 1099b information without showing net gain as taxable non covered long term gain?

 

1 Reply
TaxLady
New Member

How is sale of stock from exchange and reinvested recorded on taxes from 1099b?

From an income tax standpoint it doesn't matter if you reinvested the money received in a sale.  It is still taxable income.  For instance:  you bought 100 shares of ABC for $5000 in 2010.  You sell it 4 years later for $7500 and immediately invest the whole amount in XYZ.  You have a taxable capital gain of $2500, and your basis in XYZ is $7500.  The same is true when you reinvest dividends - the dividends are taxable income in the year received but the amount reinvested is added to the basis.  Example:  you paid $5000 for ABC stock, and in 2016 reinvested dividends of $150 to purchase more shares.  The $150 is taxable income now, but your basis is increased to $5150.

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