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Posted by Wawapluck on February 5, 2008, 1:33 pm
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Good day! I'm new to filing taxes, so I have a few questions. I'm
using Turbo Tax Deluxe to guide me through the tax filing process.
I purchased some shares for a stock in 2006. I purchased some
additional shares sometime in 2007. I decided to sell all my shares
sometime in 2007. In this situation, the 2006 shares are long-term,
while the 2007 are short-term. This is what confuses me. Turbo Tax is
telling me to separate my sale into two, so I can take into account
short-term and long-term gains & losses.
How do I do this?
Also, another question, if I re-invested the dividends for the stock,
do I count those dividends as part of my cost basis?
Thanks!
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Posted by Frank S. Duke, Jr. on February 5, 2008, 3:33 pm
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in article
cb59b3f1-726c-4989-8da8-90f9ec118b92@s12g2000prg.googlegroups.com, Wawapluck
at guitarslinger@gmail.com wrote on 2/5/08 1:33 PM:
> I purchased some shares for a stock in 2006. I purchased some
> additional shares sometime in 2007. I decided to sell all my shares
> sometime in 2007. In this situation, the 2006 shares are long-term,
> while the 2007 are short-term. This is what confuses me. Turbo Tax is
> telling me to separate my sale into two, so I can take into account
> short-term and long-term gains & losses.
>
> Also, another question, if I re-invested the dividends for the stock,
> do I count those dividends as part of my cost basis?
>
Example:
100 shares purchased 3/1/2006 for $1000
1 share purchased 6/1/2006 for $9 from reinvested div
1 share purchase 10/1/2006 for $5 from reinvested div
100 shares purchased 4/1/2007 for $1500
1 share purchase 6/1/2007 for $ from reinvested div
203 shares sole 8/1/2007 for $2436 or $12 a share
On 8/1/07 you sold 101 shares (your 1st 2 buys) long term for $1212 with a
cost of $1009. Use any date you want over a year old as the purchase date.
Your second sale was 102 shares sold short term for $1224. Use any purchase
date less than 1 year.
You can also show each individual lot and make 5 schedule D entries.
All freely provided advice guarantee correct or double your money back
Frank S. Duke, Jr. CPA
Cincinnati, OH USA
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Seth on February 5, 2008, 10:33 pm
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>Example:
>100 shares purchased 3/1/2006 for $1000
>1 share purchased 6/1/2006 for $9 from reinvested div
>1 share purchase 10/1/2006 for $5 from reinvested div
>100 shares purchased 4/1/2007 for $1500
>1 share purchase 6/1/2007 for $ from reinvested div
>203 shares sole 8/1/2007 for $2436 or $12 a share
>
>On 8/1/07 you sold 101 shares (your 1st 2 buys) long term for $1212 with a
>cost of $1009. Use any date you want over a year old as the purchase date.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
"VAR-L"
>Your second sale was 102 shares sold short term for $1224. Use any purchase
>date less than 1 year.
"VAR-S"
>You can also show each individual lot and make 5 schedule D entries.
Seth
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by removeps-groups@yahoo.com on February 5, 2008, 7:35 pm
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> I purchased some shares for a stock in 2006. I purchased some
> additional shares sometime in 2007. I decided to sell all my shares
> sometime in 2007. In this situation, the 2006 shares are long-term,
> while the 2007 are short-term. This is what confuses me. Turbo Tax is
> telling me to separate my sale into two, so I can take into account
> short-term and long-term gains & losses.
>
> How do I do this?
Just make a second transaction.
> Also, another question, if I re-invested the dividends for the stock,
> do I count those dividends as part of my cost basis?
Yes, as well as re-invested capital gains. It's painful when you have
a mutual fund that pays dividends monthly, but I made a spreadsheet
for this -- every month is a row in the spreadsheet, and you enter the
date, amount re-invested, number of shares purchased. The spreadsheet
tells you the short and long cost basis based on today's date. I
think TurboTax has a tool similar to my spreadsheet.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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