seafood10 wrote:i purchased 2 vanguard funds on my scottrade taxable account on april 28, 2012. the dividends are automatically set to reinvest for both funds. i sold all of my funds on jan. 25th, 2013 and used all the money i cashed out to purchase another vanguard fund on jan. 28th, 2013. i'm on the 28% tax bracket and my portfolio grew about $2400. here are my questions...
1. do i need to report this to the irs on my 2012 or 2013 tax return?
You should get a 1099-B from your broker for sales in 2012.
2. do i pay 15% or 28% for my capital and explain why?
Since you held them less than a year, it is all short-term gains, so rate is whatever your tax bracket is.
3. even if i didn't cash out and since my dividends are automatically reinvested on my taxable scottrade account. do i still need to report it to the irs each year if i had any capital gain or lost? or only i need to report it if i cash it all out for that tax year? what about if i only cash out partial of it, how does that work?
thx in advance.
You should get a 1099-Div from your broker reporting dividends and realized capital gains on funds you own in taxable accounts. It has nothing to do with whether you reinvested them or not. Sales will be reported to you on 1099-B with short and long-term capital gains. On sales, any money gained or lost if purchased or reinvested less than year ago would be short-term, over a year is long-term.
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