Replies to post #32938 on A.I.M. Users Bulletin Board (AIMUSERS)

[AIMster]

So the Tax Man doesn't give a hoot about the AIM-quantity and only purchase date and the IN-OUT and amount? Or does he actually look at the number of shares that were bought and share price and takes that as a profit basis, if there was any? Then the Tax Man actually treats the shares as if they were traceable units.

You got it. Shares held, then sold for less than 1 year are treated as regular income (as far as the tax rate is concerned), shares sold after 1 year are taxed at a lower rate. So yes, the purchase and sell dates are important in determining which tax rate is applicable. That's why dividend reinvestment plans with their micro-sized reinvestments of fractional shares can produce reams of lines on a tax return, some maybe only offering a taxable amount of a few cents. But it all has to be accounted for!

Best,

AIMster