03-30-2014, 11:12 AM
(03-30-2014, 10:51 AM)DRILLINDK Wrote: So, are there any other tax nightmares I should take into consideration when DGI? If my broker tracks my cost basis, then I really don't want/need to track anything?
That's right. Generally, if you are in a tax-deferred account, there is really nothing to do. If you are in a taxable account, you'll get a 1099 at the end of the year that spells out qualified and non-qualified dividends for tax purposes. You'll just need to reflect these in the proper spots on your tax forms.
And in both cases, if you ever go to sell a stock, your brokerage will / should indicate the cost basis of each and every share -- even partial shares accumulated through automatic reinvestment. You'll be able to see long and short term gain / loss for each share. I have no accounts at Merrill, so I can't vouch for them, but that's what I get over at Vanguard, and I'd be surprised if others did not do the same.