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Posted by Han on February 13, 2007, 10:48 pm
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>> Question 1: Is this correct?
> Yeah, but some caution is advised on the "Original" 250
> shares. You will need to be sure that's the case
> Instructions to your broker and their acknowledgment for
> example. You can't just "say" these shares are the original
> shares. Unless, of course, you held them in certificate
> form and surrendered the certificate to complete the sale.
>> Question 2:
>> Now I have umpteen lots of Exxon shares (each just a
>> fraction over 1 share). What is the cost basis here? How
>> can I calculate into the basis the taxes I already paid on
>> these shares? Or can I not do that?
> The taxes you paid are taxes on the money you earned
> (dividends). The fact that you chose to reinvest them is
> irrelevant. The taxes would have been due regardless of
> what you did with the money and have no meaning and no
> bearing in your cost basis calculation. Your cost for these
> "umpteen" lots is your total of your "umpteen" dividends
> plus any transaction costs or fees they charged you.
> Because you were reinvesting dividends doesn't mean you
> didn't pay any fees, many stock reinvestment programs have
> fees associated with the reinvestment of dividend although
> they are generally small in dollar terms. Should be listed
> on your "umpteen" statements.
>
> Be mindful of short term gains/losses when you sell. The
> recent quarters of dividend reinvestments will be within the
> year when you sell and that means you'll need to separately
> report those, including their separate cost basis.
And thanks, Steve the Bostonian (?)
(We started in the US in Cambridge)
--
Best regards
Han
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