Re Taxes and dividend stocks Re Taxes and dividend stocks

							                                     Re: Taxes and dividend stocks.

Re: Taxes and dividend stocks.

Source: http://newsgroups.derkeiler.com/Archive/Misc/misc.invest.stocks/2006−09/msg00566.html



      • From: "Mark A" <nobody@xxxxxxxxxxx>
      • Date: Sun, 10 Sep 2006 11:14:28 −0600

"DaLoverhino" <DaLoveRhino@xxxxxxxxxxx> wrote in message
news:1157899920.993157.16080@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

       If I have stock in Widget Co, and they give dividends, and then I
       immediately reinvest the dividends in Widget Co, (they have a DRIP
       plan) do I get taxed on the dividend? What if I reinvest the dividend
       into some other company?

       Do I get taxed on the dividend regardless of what I do with it?

       thanks.



Yes, the dividends will be taxed anyway. For that reason, I would strongly
urge you to not use a DRIP, because you will have nightmare on your hands
whenever you sell the stock trying to figure out your taxes.

Years ago, when the broker commission for buying stocks was quite high,
DRIPs made some sense, but that is no longer the case today (assuming you
use a discount online broker).


.




Re: Taxes and dividend stocks.                                                                  1