Keeping taxes simple?

[jpg7n16]

Exactly - hence the potential for having 100+ lots within 3-4 years if you reinvest all dividends quarterly. I guess no one else worries about this?

The benefits of reinvesting the dividends outweigh the tax basis complications.

Besides, your brokerage will track it all for you.

[humandraydel]

The benefits of reinvesting the dividends outweigh the tax basis complications.

Besides, your brokerage will track it all for you.

I'll definitely invest the dividends - it's just a question of if I should instead only invest 1 time per year, with a combination of dividends and new money.

I wasn't aware they changed the laws to require brokers to track it all. If it's truly that easy, I guess I'll just jump in (feet first, of course )

[kv968]

I'll definitely invest the dividends - it's just a question of if I should instead only invest 1 time per year, with a combination of dividends and new money.

I wasn't aware they changed the laws to require brokers to track it all. If it's truly that easy, I guess I'll just jump in (feet first, of course )

Starting last year the cost basis of any equity bought on or after Jan. 1, 2011 had to be reported by the broker. This year any mutual fund, DRIP or most ETF's bought on or after Jan. 1 have to be reported. Next year fixed income and options will have to be reported. Thank God for the option part

As far as investing once per year or automatically reinvesting, I'd say it would come down to whether or not your broker offers automatic reinvestment. If they do I'd just go with that. If, on the other hand, you'd have to pay a commission to reinvest (i.e. Scottrade) then I'd say wait until you have enough dividends and additional money available to make it worthwhile commission-wise.