How does tax work on individual brokerage accounts?
When do you get taxed on brokerage accounts? Say i open a vanguard account and invest in a mutual fund. I select options to always reinvest dividends, i make an 8% gain on said mutual fund for the year. - do i get taxed on the 8% even though i didnt sell the mutual fund? -are my reinvested divedends taxed? - if i decide to shift the stocks from that mutual fund to another, will i get taxed for that? Thanks!
Asked By: Cinnamon - 10/23/2011
Best Answer - Chosen by Asker
Mutual funds do not pay taxes all gains and loses are passed to shareholders and get to claim which is one of the many reasons mutual funds suck for anyone with money, a job and or children. If you sell stock and have a gain you pay taxes if a loss a deduction of up to $3000 per year above any gains
Answered By: Calvin C - 10/23/2011
Additional Answers (7)
YES YES YES and YES to all of the above questions... More
Answered By: Bobbie - 10/23/2011
Whatever dividends a mutual fund (or any other investment) generates are taxable in the year they are earned, regardless if you take them out of the account, leave them in the account as cash, reinvest them, etc., so yes, you get taxed on the dividends earned... More
Answered By: superj300 - 10/23/2011
Yo don't get taxed on the gain until you sell. Dividends are taxed though, whether you take the money or reinvest them. If you shift from one fund to another, it's basically a sale of the first one, then a purchase of the other - you are taxes if you make a profit on the sale.
Answered By: Judy - 10/23/2011
you get a 1099 B on proceeds of anything you sell you report your profit or loss on the sale and pay the appropriate tax
Answered By: tro - 10/23/2011
You are taxed on all dividends, even if you reinvest them. If you shift from one fund to another, then you must calculate the "capital gain" or "capital loss". If there is a gain, then you must pay tax on it. In most cases, if there is a loss, then you can deduct some or all of it.
Answered By: StephenWeinstein - 10/23/2011
You get taxed on gains from sales. If you sell and buy something new, you get taxed on the gain of the sale of the first one.
Answered By: the kid - 10/24/2011
All fine answers but, alas, not complete... More
Answered By: RetirementGuru - 10/24/2011
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