Taxes on Stock?

kismet · ‎03-10-2010

Year ago when I bought stock I was told that I didn't have to pay taxes on the stock unless I sold it and made a profit. So we go to a woman that was recommended by a friend that use to work for some tax service. Now she has her own office. She is not a CPA. She told us that we have to report all the money made on stock even if it's not sold. We've had this stock for years and just in the last two years have made a lot on it. My question is do I have to pay tax on stock that value is only on paper and no cash to me. This has me confused. I found this online.

One of the best tax breaks in investing is that no matter how big a paper profit you have on a stock you own, you don't have to pay taxes until you actually sell your shares. Once you do, though, you'll owe capital gains tax, and how much you'll pay depends on a number of factors.

Asking for others experience on taxes on stock. I was told two different things by two different people that I pay to do my return.

Thanks.

vacationday · ‎01-29-2019

Reporting it..that's it. It's not added as income, just reported.

kismet · ‎03-10-2010

I'll check and see where she put it last year. I've always done my own returns until all the questions about stock and retirement benefits. So I guess what I was told probably 30 years ago was right, unless it's sold it should not be income.

aroc3435 · ‎09-30-2010

@kismet I believe that you have to hold/own the stock for a year and a day, i.e. date you purchased the stock plus one more calendar day before selling.

But do check with a tax expert. Hope this helps.

kismet · ‎03-10-2010

I checked the forms and she did report it as income. We've had this stock since the 90s so it's lost and gained over and over. We did have one that went under and we did get I think it was a credit for the amount we paid for the stock. I think this year I'll do it myself like I did for years. I worked for a CPA for several years but I never did the more complicated tax returns. No computers then.

FrostyBabe1 · ‎05-09-2016

No, you don’t pay taxes on the value of stock you still own. However, you DO have to pay taxes on the income (dividends) you receive. You’ll get a 1099 for it, either from your brokerage firm if it’s held in a brokerage account or directly from the company.

~The more someone needs to brag about how wonderful, special, successful, wealthy or important they are, the greater the likelihood that it isn't true. ~

Cats3000 · ‎10-07-2013

The tax code was radically changed. I do know from personal experience that dividends and capital gains I receive from my taxable mutual funds ARE reported as income even though I reinvest those dividends and capital gains.

I'm not sure what the current rules are for individual stocks. You might try going to the IRS website for information.

FrostyBabe1 · ‎05-09-2016

@Cats3000 wrote:
The tax code was radically changed. I do know from personal experience that dividends and capital gains I receive from my taxable mutual funds ARE reported as income even though I reinvest those dividends and capital gains.

I'm not sure what the current rules are for individual stocks. You might try going to the IRS website for information.

The changes in the tax code didn't change anything in how income from stocks and mutual funds is taxed. However, it did eliminate the deduction of investment advisory fees.

~The more someone needs to brag about how wonderful, special, successful, wealthy or important they are, the greater the likelihood that it isn't true. ~

depglass · ‎03-10-2010

You will receive a 1099 when you have to report dividends. We just switched to a CPA as our old preparer went out of buiness. The new one found a payment on a Roth withdrawal on last year's form. You don't pay tax on Roth withdrawals, that's the point of having them, you already paid the tax when you earned the money. I did not catch it, so then and there decided it will be worth paying a little more for a CPA.

kismet · ‎03-10-2010

The income that was reported on the stock was the dividend so guess I'll be reporting it. We do have Roth IRA's but have never touched them. I wish we didn't even have to take money from our 401K since we are earning more in it. Thanks for the info. Has anyone put money in the online companies that pay more interest. It would be strange not to be able to go and physically stand and take money out when wanted. Have been thinking about that. Of course it would be insured by FDIC.