Irish asked in Business & FinanceInvesting · 1 month ago

Do capital gains get taxed if I reinvest them?

Hi everyone,

I'm thinking about investing in stocks, and I am trying to learn more about them before diving in. One question that I have that I can't seem to find an answer for is, if I sell some shares, but then I re-invest the profit right away, rather than transferring the money to my bank account, would I still need to report that to the IRS and would it get taxed?

3 Answers

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  • Steve
    Lv 6
    1 month ago

    Wayne is correct. Id just like to add, in case you didnt know, is that what you sell is taxed differently based on how long you held what you sold. The longer you held it, the less you are taxed on it. Of course there is a time table for that, but without looking it up I dont know it. Hope that helps as well.

  • 1 month ago

    If you simply open a standard brokerage account all capital gains (and capital losses) should be reported in for the tax year in which they are realized.  (A gain or loss is realized at the time a position is closed for any reason. The most common way or realizing a gain is by selling a stock you previously purchased.)

    If you open a retirement account, such as an IRA or a 401(k), you will not pay taxes on capital gains (or take advantage of capital losses) as long as the funds remain in the retirement account.

  • 1 month ago

    Yes.

    You pay taxes on the gains whether or not you by another stock with the proceeds.

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