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New Member
posted Feb 1, 2022 4:23:25 AM

If I received money as a reward from Robinhood to purchase stock, does this mean I bought the investment?

For example, Robinhood rewards you with one share of a free stock when your brokerage application is approved. Would this qualify as me purchasing the stock? If not, what would this be considered as?

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Expert Alumni
Feb 1, 2022 5:48:43 AM

The free share of stock from Robinhood is not reportable until sale of the stock.

 

If you were given the stock in 2020 with a value of $5 and sold the stock in 2021 for $15, you would report a $10 capital gain on form 1040 Schedule D.

 

If you owned the stock more than one year, you would qualify for long term capital gain treatment.  If you owned the stock less than one year, you would qualify for short term capital gain treatment.

 

Robinhood would provide a 1099-B broker statement for the sale transaction.

 

See also this.