| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 355.1 | | SOLVIT::REDZIN::DCOX | | Fri Jan 15 1993 01:18 | 9 |
| Service charges paid by the company are, in a sense, in lieu of
brokerage charges. Since the company pays them for you, they are
considered taxable income, just like dividends, and are to be claimed
as such, just like the dividends.
Include these charges in Line 9, 1040 or Schedule B, line 5 if
appropriate.
Dave
|
| 355.2 | Also.......... | CXCAD::BERZON | | Fri Jan 15 1993 20:32 | 5 |
| These charges are also added to your basis for the stock.
Thus when you sell the shares, you will reduce your capital gains
(increase capital loss) by this amount.
Jake
|
| 355.3 | Another question on DRIP's | HDLITE::HORTON | Ken Horton, KA1GFN | Mon Jan 18 1993 13:07 | 8 |
| Re : .2
Is this still the case where he did not pay the service charge. It was payed
by the company. As .1 says he only pays the tax on it as income.
Another question on DRIP's. If the company sell to you at a discount will
there be any tax consequences or will this be handled when you actually
sell. What will the cost basis on the stock be when it is sold.
|
| 355.4 | DRIPS at a discount | YNGSTR::BROWN | | Mon Jan 18 1993 15:24 | 8 |
| Hi Ken,
DRIPS at a discount are treated *EXACTLY LIKE* the 15% ESPP
discount; i.e. there's "income" on the day you buy it that
is (supposed to be) reported that year. Later, when you sell,
you use the sale price - buy price (where buy price is the
non discounted FMV on the buy date). This my understanding;
mileage may vary. Kratz
|
| 355.5 | I would ask the DRIP's administrator! | CXCAD::BERZON | | Mon Jan 18 1993 15:32 | 12 |
| >Is this still the case where he did not pay the service charge. It was
>payed by the company. As .1 says he only pays the tax on it as income.
Yes, that is my understanding of how that would work.
> If the company sells to you at a discount will there be any tax
> consequences or will this be handled when you actually sell?
Depends on how the company treats it when they report this transaction
to you. It could be treated as ordinary income or short/long term
capital gains at the time of sale.
Jake
|