Good morning,
My question concerns taxation of reinvested dividends. Assume the following:
1.Mutual fund A has an initial investment of $10K, 50 shares
2.Cost basis is set as Average Cost
3.The fund pays a quarterly dividend which is taxed in the current year and reinvested
4.After two years the balance is $12K and 60 shares, 20 of which are reinvested dividends
5.If one sells the total fund with a capital gain, are the shares purchased with reinvested dividends taxed twice, once when paid and again as part of the capital gain on sale?
My question concerns taxation of reinvested dividends. Assume the following:
1.Mutual fund A has an initial investment of $10K, 50 shares
2.Cost basis is set as Average Cost
3.The fund pays a quarterly dividend which is taxed in the current year and reinvested
4.After two years the balance is $12K and 60 shares, 20 of which are reinvested dividends
5.If one sells the total fund with a capital gain, are the shares purchased with reinvested dividends taxed twice, once when paid and again as part of the capital gain on sale?
Statistics: Posted by Exeter — Mon Dec 16, 2024 7:48 am — Replies 6 — Views 370