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?

[mhusain76]

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

[Anonymous]

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]

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]

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]

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

[fanfare]

Is REIT a covered security ?

[fanfare]

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]

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

[Critter]

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