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How to avoid tax problems

Many investors deal with taxes when selling stocks or cashing their dividends. Taxation is always a problem which is in many cases overlooked and badly planned. I must admit I need help myself and always look for professionals who can provide me with planning with personal taxes (since I am a private investor).

Many times I have to deal with calculating stock price basis when selling them. A broadly overlooked part on my side was that when computing my basis in stock sold in one particular year, I didn’t include any dividends that were automatically reinvested into shares since the time of purchase. This and any fees involved with the purchase of shares are considered cost basis and will reduce your capital gains.

One way how to avoid tax problems and confusions would be to hire a tax professional who can provide you with help and planning. If you are not sure, and need IRS tax relief, go and hire a professional to help you with the job to avoid paying unnecessary taxes.

Happy Trading!

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