How to figure capital gain/loss?

Question

I worked for a company for 5 years. Money was held from each paycheck to purchase co. stock. It has been 2 years since I worked for that company but I left the stocks where they were. Last year I made several withdrawals but not the total amount of the stock. How do I figure gain/loss for tax purposes?? Also, dividends were used to purchase more stock. I am confused since I do not know what the purchase price was and it was different over the years. If anyone can explain this in detail it would be appreciated, over my head on this one.

Also, the company I started with was bought by another company and shares were transferred to new company. Do I use original purchase with old co. or the purchase price at the time of the transfer?

Answer 1

You should have been receiving each year something from them showing the activity for the stock purchases, and the dividend re-investments. If not you could try calling them and see if they would provide that for you. As for gain/loss, that is simply if you sold the stock for more than you bought it for it's a gain, if you sold it for less than it's a loss. Gains are fully taxable in the year of the sale, but the IRS limits stock losses to a write off of $3,000 per year, but also lets you apply losses against gains during the year.

Answer 2

When you sell stock which was purchased over time, you use the first in first out method to determine which stock you sold. The first stocks you bought were the first sold, continuing through the number of shares you sold. You bought each share of stock at the current mkt price for that stock on the day you bought it. Your dividends basis in your stock, as you paid tax on them in the yr you earned them even though you did not take them out of the account. You have to determine your original cost for each stock, the company should have a record of this, or you can go on line to a site like Big Charts which does historical prices for stocks. You added to the basis each time your dividend was reinvested, so you calculate the basis for the total stock you owned; cost of each share plus dividends. You then divide this total basis by the number of shares you originally owned before you started selling; and get a basis per share. Multiply this times the number of shares sold and you have your cost. You take the total amount you sold it for, subtract the basis per share x the number of shares and the remainder is the gain.

Answer 3

Your basis is what you paid for the stock, plus the amount of any reinvested dividends since you would have paid taxes on those the year the dividends were given. For what you paid, you'd add up what was withheld from your paychecks to purchase it. Once you get your basis calculated, divide the total by the number of shares you had altogether, and use that to figure the basis for the number of shares you sold. You can put "various" for date purchased, then multiply your per-share basis by the number sold to get purchase price.

The value of the shares when transferred to another company's stock has no bearing on your basis. Use what YOU paid in.

You are allowed to use FIFO, claiming cost of the earliest shares you bought for the earliest sales, but you'll drive yourself crazy trying to do the calculations. Just use average cost. It's easier, cleaner, and as legal as FIFO.

Answer 4

Sold 100 Shares of Stock in 2014 (FIFO) that were purchased over 10 years from the original dividends. I let the Dividends reinvest. Total Dividend for 20 years was $1121.00. Sold stock for $6230.00.
What's the taxable amount.

Answer 5

alongside with a 1040, you will additionally want a time table D. in case you do no longer frequently use tax application, you'll be waiting to easily look on the time table D and its instructions and fill it in, quite in case you in ordinary terms had some revenues. in case you had one hundred different revenues it does no longer in all probability be harder, yet could be longer and a soreness. the ideal area is for short term, shares you owned a twelve months or much less until now you bought them. the backside a million/2 of the front internet site is for long term, something you owned for no less than a twelve months and an afternoon. Fill in those lines, then do exactly the math the variety tells you to do. you'll be ok. a style from the tip of the time table D will circulate to the 1040 - it permit you be attentive to the place. the only complicated area, and it is not all that undesirable, is which you may have some thing noted as a carryover. you could in ordinary terms take $3000 of the internet capital loss each and each twelve months against different, non-time table D earnings. something is "carried over" to next twelve months - no longer something very complicated approximately it, you in ordinary terms might desire to recollect it next twelve months once you bypass to do your 2012 return.