![]() You’ll likely receive only one statement, but it will include multiple tax documents as necessary. ![]() Robinhood offers very little customer support, but you can count on them to provide you with important tax documents at the end of the year. If those stocks exceed $600 in value, both you and Robinhood must report the money to the IRS as income. You may get a free stock for joining the site or for referring a friend. Note, too that sometimes Robinhood gives account holders free stock. The prevents taxpayers from intentionally racking up losses as a tax-reduction strategy. The same is true if you buy the same stock 30 days before you sell it. If you sell a stock at a loss but then buy an identical or very similar stock within 30 days, you have participated in a wash sale and cannot claim the loss on your tax return. Remember the wash sale rule when doing so, however. Stocks held longer than a year get taxed at the more favorable long term capital gains rates of 0, 15 or 20 percent, depending n your income level.Īs usual, you are free to report a capital loss as well as gains on your tax return. Stocks held less than one year are subject to the short term capital gains tax rate, which is the same tax rate you pay on your ordinary income. You will, however, need to pay tax on any profits you make when you sell stock. Stocks, too, are taxed normally.Īs always, you won’t have to pay tax on a stock simply because its value increased. Dividends are still divided into qualified and ordinary dividends, with qualified dividends being taxed at a lower rate. IRS Publication 550 explains the rules in much greater detail, but investments managed through Robinhood get taxed the same way as other investments. You may be able to execute trades for free on Robinhood, but the IRS will still expect you to pay taxes on selling stocks. Unfortunately, the IRS does not adhere to the same free fee structure as the platform. Offering free trades with no minimum account balance, Robinhood has become a popular investment site for those who wish to dabble in stocks and cryptocurrency.
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