Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Still need to file? Our experts can get your taxes done right. Get started >
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
mhusain76
New Member

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

I usually invest in private REIT (fundrise, richuncles) and every year I pay taxes on the dividends that I receive which I reinvest back in to the REIT. My concerns is do I pay taxes again lets say after 5 years when I remove all my investment out of the REIT

8 Replies
Anonymous
Not applicable

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

when you move all the money out of the REIT you will have either a taxable gain or loss.     if the proceeds you receive are different from your basis that you have a gain or loss.     since you say this is a private ReIT,  when you redeem the REIT you should be provided with a schedule that will allow you to compute your gain/loss.     .    some will be long-term some short-term   the short-term is due to cashing in reinvested  dividends that haven't been held one year.

Critter
Level 15

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

You are NOT taxed twice ... you pay taxes on the dividends ... then you use that money to buy more stock in the REIT so that is now the basis in the new stock.  When you sell the stock you only pay taxes on the profits after the basis is deducted.   

Just because you auto reinvested the dividends  and didn't physically touch the dividend check doesn't change the fact that you bought stock with taxable money you earned. 

VolvoGirl
Level 15

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

So make sure to add the reinvested dividends into your cost.  A reinvested dividend is really 2 transactions, a dividend and a buy more shares.  
Critter
Level 15

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

The broker should be keeping the cost basis records for you ... ask them.
fanfare
Level 15

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

Is REIT a covered security ?
fanfare
Level 15

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

Enter a ReinvDiv transaction in Quicken which does the right thing.
For completely accurate results, you would have to go back to your original investment and record all reinvested dividends.
fanfare
Level 15

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

OK, if you don't use Quicken, Never Mind !
Critter
Level 15

I invest in private REIT and usually reinvest the dividends. Beside paying taxes on the dividends do I have to pay taxes again when I take all the money out of the REIT?

Is REIT a covered security ?   IT IS if it is housed inside a broker's account.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
message box icon

Ready to start your taxes?

Hand off your taxes, get expert help, or do it yourself.

See Pricing
Manage cookies
v
ABCDEFGHIJKLMNOPQRSTUVWXYZabcdefghijklmnopqrstuvwxyz0123456789-_~