Did you know...When you sell shares in a DRIP, capital gain calculations have to be separately calculated for each purchase (including reinvestments), then totalled?
 
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Selling Shares

For most DRIP investors, this is a taboo topic.  DRIP investors should be more concerned about obtaining more shares of stock than they are about selling them.  Still, most people will end up selling their shares at some point.  And without a broker, you are left high-and-dry trying to figure out how to file it on your taxes.

What is so complicated about selling shares from DRIPs?
If you have been enrolled in a DRIP for long and then decide to sell your shares, you may be faced with a nearly impossible task.  The IRS expects you to report capital gains on your stock sale.  Capital gains is the difference between sale price and purchase price multiplied by the number of shares.

In a typical investment, where you only bought shares once or twice, this isn't too complicated.  But in DRIPs, you may be purchasing shares as often as 12 times per year.

If you were to try to calculate capital gains without the use of the DRIP Wizard, you would have to answer some tough questions:

  • which shares am I selling, which ones am I keeping?

  • how will I keep track of which shares remain and which ones are gone?

  • what is my total capital gains and how can I show the IRS if it is questioned?

  • how do I take into account stock splits?

Even for a person with a degree in Accounting, the task of tracking capital gains after the sale of stocks in DRIPs can be nearly impossible.

But with the DRIP Wizard, just point-and-click your way through a sell transaction.  The DRIP Wizard will automatically help you determine which shares are sold and which ones will remain.  The information will be shown to you in a clear, concise way.  When the tax year ends, just generate a Tax Summary and all of the capital gains for the year will be listed and totaled.

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