Buying Stocks...Here's What You Must Do For Taxes

If you are going to buy mutual funds or any other account that contains stocks, make sure you keep track of your cost basis for tax purposes. DO NOT!

I repeat, DO NOT count on your stock broker/financial firm to do it for you. Stock sales generate proceeds which are taxable as capital gains. You then pay ordinary income tax rates on the gains (if held less than one year before selling), or you pay capital gains tax rates (if held more than one year).

The amount you pay taxes on equals your proceeds minus any cost basis you have in the stock. This is called your gain. Cost basis is generally what you paid for the stock plus any broker fees, etc. Therefore, keeping track of your cost basis lowers the taxable gain.

Contact me if you have questions I can answer on this topic....