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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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