I own a few stocks and mutual funds and I am still holding (haven’t sold any of them, I plan on having them for 5 or so years ) how do I declare taxes? will they tax me money I haven’t redeem? will I have to pay taxes right now for a stock or mutual fund that tomorrow can lose a lot of money? I mean it is not like I actually have the money in my hands!. This is my first year owning stocks and mutual funds so please be kind.
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How do you pay taxes on Stocks and mutual funds you didn't redeem?
KingGeorge 6:42 am on August 11, 2010
You do not pay taxes from just owning stocks and mutual funds. Some or many stocks pay a dividend to the shareholders. Mutual funds might pay out capital gains plus pay out dividends or interest as required by fedearl law.
If you have not redeemed any shares of stock or mutual funds, you must still declare any of the dividends paid on your stock shares and dividends and capital gains on your mutual funds. You should receive 1099-div and 1099-int forms from your brokerage house or directly from the mutual fund and or stock to help you figure out how much you must declare.
You will declare these amounts on your 1040 schedule B and schedule D.
gabster_65 6:42 am on August 11, 2010
If you still owned the stock at the end of the year, and have not realized a gain or loss on them at sale, they are not taxed. Same for the actual shares in a mutual fund.
But, if you received dividends from the stock, or a distribution on the mutual fund, this would be considered income and would be taxable.
muncie birder 6:42 am on August 11, 2010
You must pay taxes only on the amounts reported on the 1099s you receive. The mutual funds will certainly send you some. Other than that you do not need to pay taxes on any thing else until you liquidate some of your holdings. You will also receive 1099s on those, but on those you can subract your costs.