business

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Issue:

Business

 

Written by:

Patrick N

 

Date added:

February 13, 2014

 

Level:

 

Grade:

A

 

No of pages / words:

5 / 1129

 

Was viewed:

9749 times

 

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Essay content:

For example, say you originally invested $5,000 in a mutual fund and had $1,000 in dividends reinvested in additional shares over the years. If you then sold your stake in the fund for $7,500, your taxable gain would be the result of subtracting from the $7,500 both the original $5,000 investment and the $1,000 reinvested dividends...
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Thus, your taxable gain would be $1,500. Many people would forget to deduct their reinvested dividends and end up paying tax on $2,500. While the reduction in taxable income in this example may not seem like a big difference, failing to take advantage of this rule could cost you significantly in the long run...
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