Dividend Tax Question

12 Replies

Evening BP,

            Want to reinvest my dividends from my brokerage account and if I reinvest it within the calendar year do I avoid capital gains? So, technically I am not taking any realized gains. 

Thanks. 

Originally posted by @Andrew Pettit :

Evening BP,

            Want to reinvest my dividends from my brokerage account and if I reinvest it within the calendar year do I avoid capital gains? So, technically I am not taking any realized gains. 

Thanks. 

First of all, dividends are not capital gain. They are portfolio incomes and they are taxed at ordinary rate.

Reinvestment within the brokers account and some other things are possible but that would not avoid taxes. 



I have an ETF that and own a couple of individual stocks so I should have been reporting that on my taxes then? 

Thanks Aaron & Ashish. 

I have my regular brokerage account that has my individual stocks and ETF and my Traditional self directed ROTH but that is deferred up to $6000, correct? 

Your brokerage account is taxed and they should be sending you a form 1099-DIV every year, your Roth account is never taxed on anything it generates until it comes out of that account or when you die.

@Andrew Pettit

Clarification from several posts above regarding dividends: Certain dividends are qualified dividends and ARE taxed at the capital gains rate. This includes US corporations, certain foreign corporations (not all foreign, consult with tax advisor), and captive insurance companies (when structured correctly).

To recap,   

-I have to report any dividends received durning the calendar year even though they were reinvested. Unless it is my Traditional IRA, correct?

            -Also, even though I have a good amount of dividends my real estate should offset my AGI? 

Thanks. 

@Andrew Pettit

Reinvesting your dividends still requires the dividends to be reported aslong as it is not held in a retirement account.

Earnings in a retirement account are either deferred(traditional) or excluded(roth).