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  1. #1
    Boilerman Bill BPnta's Avatar
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    Quick stock / tax question

    Got a quick question for the market pros out there:

    I purchased a little (valued at less than a grand) stock from one company about six months ago via a new scottrade account. First trade ever. I haven't done anything with it just held on to it. No dividends either.

    Do I need to report this to the IRS? I'm trying to figure out what version of turbo tax to buy. It seems the premier is only needed if you sell any stock.

    Thanks!


  2. #2
    mjh3ides's Avatar
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    Even if there are no taxable events in the account, Scottrade will probably still send you a 1099 to include with your return. I can't tell you for sure if you have to include it though.

    In the future, if you continue building a portfolio the 1099 they send you will break down qualified/unqualified dividends. You will need to keep track of the holding periods on your positions, because depending on your tax bracket it can make a significant difference in your tax bill. Long term capital gains(positions held more than one year) are only taxed at 15% while short term cap gains are taxed the same as ordinary income. Also, realize you cannot immediately reenter a position that you've sold to book a loss...ex: if you have $1000 in gains but have one position that's down $500, you can sell the down position to offset your gain. However, you can't book the loss on Dec 31 & buy it back a week later...this is called a wash sale. You have to wait at least 31 days. You also can't get around the rule by buying "like securities"...ex: call options & convertible bonds.

    Sorry I couldn't give you a definitive answer to you question & told you a whole bunch of stuff you didn't ask about. Just wanted to point out some important tax implications to consider if you continue investing.

  3. #3
    ride it like you stole it!!! raceneked's Avatar
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    turbo tax? really?

    I don't trust it.

    If you were in CA, I'd have a spiff tax person for ya.

  4. #4
    Boilerman Bill BPnta's Avatar
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    Quote Originally Posted by mjh3ides View Post
    Even if there are no taxable events in the account, Scottrade will probably still send you a 1099 to include with your return. I can't tell you for sure if you have to include it though.

    In the future, if you continue building a portfolio the 1099 they send you will break down qualified/unqualified dividends. You will need to keep track of the holding periods on your positions, because depending on your tax bracket it can make a significant difference in your tax bill. Long term capital gains(positions held more than one year) are only taxed at 15% while short term cap gains are taxed the same as ordinary income. Also, realize you cannot immediately reenter a position that you've sold to book a loss...ex: if you have $1000 in gains but have one position that's down $500, you can sell the down position to offset your gain. However, you can't book the loss on Dec 31 & buy it back a week later...this is called a wash sale. You have to wait at least 31 days. You also can't get around the rule by buying "like securities"...ex: call options & convertible bonds.

    Sorry I couldn't give you a definitive answer to you question & told you a whole bunch of stuff you didn't ask about. Just wanted to point out some important tax implications to consider if you continue investing.
    It's fine mjh3ides, thank you for the tips. I'm really new to the game so I started with very little until I get the hang of things. Still don't know if it's for me though.



    Quote Originally Posted by raceneked View Post
    turbo tax? really?

    I don't trust it.

    If you were in CA, I'd have a spiff tax person for ya.
    What's wrong with turbo tax? Not being a butthead just really never thought of trying anything else.

  5. #5
    mjh3ides's Avatar
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    Quote Originally Posted by raceneked View Post
    turbo tax? really?

    I don't trust it.

    If you were in CA, I'd have a spiff tax person for ya.
    Turbo Tax worked out great for Treasury Secretary Geithner. Don't pay your taxes & get a job as the head of the IRS...Only in America!

  6. #6
    steach's Avatar
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    Quote Originally Posted by BPnta View Post
    Got a quick question for the market pros out there:

    I purchased a little (valued at less than a grand) stock from one company about six months ago via a new scottrade account. First trade ever. I haven't done anything with it just held on to it. No dividends either.

    Do I need to report this to the IRS? I'm trying to figure out what version of turbo tax to buy. It seems the premier is only needed if you sell any stock.

    Thanks!
    If you had no sales or dividends you have nothing to claim.

    The software is only as good as the questions asked and interpretations of answers...still WAY BETTER than chain preparers (HR Block/Jackson Hewit...)

  7. #7
    oklagp1200r's Avatar
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    To hell with stocks invest in Gold,Silver,Etc.
    You wont lose your money there!

    Turbo Tax all the way depending on your Tax situation!

  8. #8
    mjh3ides's Avatar
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    Quote Originally Posted by steach View Post
    ...still WAY BETTER than chain preparers (HR Block/Jackson Hewit...)
    +1 Those people are idiots. They are not CPA's, just people trained(somewhat) on the software.

    Quote Originally Posted by oklagp1200r View Post
    To hell with stocks invest in Gold,Silver,Etc.
    You wont lose your money there!

    Turbo Tax all the way depending on your Tax situation!
    That's the same thing everyone said about real estate a few years back, & tech stocks a few years before that.

    FYI, there are several tax software companies that offer free tax prep based on your AGI & location listed on the IRS site:
    http://apps.irs.gov/app/freeFile/jsp/index.jsp?ck

  9. #9
    Addicted Member 5001craig's Avatar
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    I've been using Turbotax since '07 and it works like a charm for me.

    Now back on topic, Bill.

  10. #10
    Rampage's Avatar
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    ugh no more dividends and CPA talk I have an accounting test tomorrow about stocks and dividends and all that other fun stuff. Kill me please? lol.

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