Personal Finance & Money Asked by Dan the Hoosier Man on June 4, 2021
I have two different personal accounts. One on Robinhood and one with Webull. I have many shares of a stock in Robinhood that I am trying to hold for a year or more before I sell. At the same time I am adding shares of the same stock on Web Bull.
If I’ve held all of the shares held in Robinhood for more than a year but I’ve held the same stock for less than a year in Webull how would that work out for taxes?
Would it be the 15 or 20% for long term gains on Robinhood shares that I own or will I have to sell some at the standard rate because I’ve held the same company in a different account.
If you sell shares that you held for less than a year, it's a short term capital gain and is taxed at regular rates. If you sell shares that you held for more than a year, it's a long term capital gain and is taxed at the lower rate. If you sell some of each, then the ones you held less than a year are taxed at the higher rate and the ones taht you held more than a year are taxed at the lower rate. Whether you hold the shares through one brokerage or two doesn't change this.
I had one time that I bought some stock, a year later bought more stock in the same company, and then less than a year later sold it all. So I had to pay the higher rate on the stock I'd bought last and I paid the lower rate on the stock I'd bought first. There's no problem reporting this on your taxes. The IRS is not confused by two line items for shares in the same company with two different purchase dates. They'll likely have a different basis too. This happens all the time.
Answered by Jay on June 4, 2021
If I've held all of the shares held in Robinhood for more than a year but I've held the same stock for less than a year in Webull how would that work out for taxes?
If you sell the shares you own in Robinhood, you'll have a long-term capital gain/loss from sale of those shares. If you sell the shares you own in Webull you'll have a short-term capital gain/loss from sale of those shares. If you sold all shares from both accounts nothing above changes, you'd have both long and short-term gains/losses to report.
If all the shares were in one account, and you sold only the number that you've held for more than a year, you'd have a long-term capital gain/loss from sale of those shares. That's because by default brokers will sell your oldest shares first (FIFO - first in, first out).
With some brokers you can elect which shares to sell if you don't want them to sell your oldest shares. Having multiple accounts doesn't affect your tax rate, it does make it easier to pick which shares to sell in a case like yours where the brokers don't support deviating from FIFO.
Be mindful of wash-sale rules when using multiple accounts, your brokers don't know what you are doing in other accounts so it will be on you to correctly report everything. Here's a decent introduction to wash sale rules.
Answered by Hart CO on June 4, 2021
Get help from others!
Recent Questions
Recent Answers
© 2024 TransWikia.com. All rights reserved. Sites we Love: PCI Database, UKBizDB, Menu Kuliner, Sharing RPP