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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 9688
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I am not sure he understood my question. As shareholders, we

Customer Question

Hi Pearl, I am not sure he understood my question. As shareholders, we need to pay tax even the share worth nothing yet. I thought the tax is calculated based on the initial price. My question is where this initial price is kept, by state
or IRS?
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Customer: no, this is it
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Submitted: 4 months ago.
Category: Tax
Expert:  Lane replied 4 months ago.



We do no pay taxes on HOLDING stocks. We pay a capital gains tax when the shares are sole (if sold for a price higher than initially paid.


If the shares generate dividends, we also pay tax on that dividend income.


And if we are given shares in return for services that is considered compensation and we pay an income tax on that.


But we are not taxed for simply holding shares ... there must be a taxable event (a sale, income, etc)


Does that help?

Expert:  Lane replied 4 months ago.

Please let me know if you have any questions at all.


If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit")

JustAnswer will not credit me for the work unless you do.


Thank you!


I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

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