Let me put my question with an example.
I buy citibank stock for say $48 today. At the end of the year, I have say $3 in capital gains and $2 of dividends (hypothetical numbers).
If I understand correctly, I will pay a tax at 15% on my $2 divident. But I will pay no tax on the capital gains. If I have not sold the stock.
To put it in simple words. If i buy and hold a stock for 10 years, I pay no tax on capital gains until I sell it? Is that true? If that is true, then this is a great option for tax deferred investment. Am I right?
I am already maxing out on my 401k and IRA. So, am looking for an alternate tax deferred investment for additional savings.
Please advice guys. Thanks a zillion
2006-08-28
04:11:43
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6 answers
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asked by
NapWala
2