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Level 1
posted Aug 28, 2021 1:14:15 PM

Do stock reduce AGI?

I bought stock this year since I dispensable AGI (adjusted gross income). Does this lower my AGI and thus lower my taxes? I know I am taxed on capital gains. But how to stock affect my AGI?

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1 Best answer
Level 7
Aug 28, 2021 1:22:19 PM

Buying stock does not reduce your AGI and does not reduce your taxes.  Only selling stock affects your income and AGI.

2 Replies
Level 7
Aug 28, 2021 1:22:19 PM

Buying stock does not reduce your AGI and does not reduce your taxes.  Only selling stock affects your income and AGI.

Level 15
Aug 28, 2021 2:07:43 PM

And what do you mean "dispensable AGI"?   No, buying stock doesn't affect your AGI or lower your taxes.  Unless you made a deductible contribution to a Traditional IRA account.   

 

When you sell the stock you will have a gain or loss which will affect your taxes.  If you hold the stock for more than 1 year it will be a long term sale and get taxed at capital gains rate.  If you sell it for a loss you can deduct the loss from your AGI with limitations.