Open Question: DRIP tax considerations?
I'm a little confused on how taxes work for a DRIP. I've done a lot of online research but it's still a little vague but here's my interpretation so far...
I invest in a company for say 10 years. Each year, I report how much money I received in dividends (all of which I have chosen to reinvest), and I pay taxes on that amount.
Then I go to sell the shares at the 10 year mark.
(Final sale amount) - (initial investment + initial commission + (each dividend times their respective share prices) + final commission to sale the shares) = capital gains that I pay taxes on.
Is this correct or did I misinterpret what I've been reading?
