Hoping you guys can help me here. I understand that some of my investments issue dividends and if they are kept in cash, they are taxed according to the dividend tax brackets I can find online. I just figured out how to log into my brokerage account and switch all my equities so that my dividends are reinvested into back into my holdings. From this sub, it seems like reinvestment is the smartest strategy if you do not need the dividend payment as immediate income.
My question is how long do I have to reinvest those earnings back into the stock to prevent a taxable event from happening? Can I sit on the cash for a day, a month, less than a year and still be able to buy new positions without that dividend being taxed? What happens when the dividend issued is say $34 but the purchase price of a stock is $39 or $30?
I just had several thousand dollars built up into my account and bought a bunch of new stocks with those earnings. I assume I'm going to have to pay dividend gains on that cash but I'm hoping to avoid the taxes today, reinvest immediately, and pay capital gains tax on everything later when I withdraw.
Submitted July 28, 2018 at 03:37PM by phaskellhall https://ift.tt/2mMLc9U
