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mfprowley
New Member

Will the tax I pay on my reinvested cap gains now be considered in my basis when I finally start selling when I retire?

 
4 Replies
robtm
Level 8

Will the tax I pay on my reinvested cap gains now be considered in my basis when I finally start selling when I retire?

Yes, any reinvested dividends or capital gains should be added to your cost basis when you sell.

ToddL99
Expert Alumni

Will the tax I pay on my reinvested cap gains now be considered in my basis when I finally start selling when I retire?

To be a bit more specific, the taxes you pay on reinvested dividends or capital gains are NOT added to your cost basis when you sell - just the reinvested dividends or capital gains.

mfprowley
New Member

Will the tax I pay on my reinvested cap gains now be considered in my basis when I finally start selling when I retire?

My question really was will I somehow be taxed on my cap gains twice. I spoke to another expert who said that my cap gains will up adjust my basis So that I am not taxed on it twice.  Does that make sense?

pattif12
Expert Alumni

Will the tax I pay on my reinvested cap gains now be considered in my basis when I finally start selling when I retire?

You will not be taxed on your capital gains twice. You will be taxed in the year that the capital gains are received. That amount of the capital gains is added to the basis of your investment and when that is sold you will be taxed only on the gain, not the basis.

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