Do you pay taxes on reinvested capital gains?

The answer is yes in many cases: you pay taxes on reinvested capital gains. The tax rate depends on how long you held the asset and whether the capital gains are considered short-term or long-term: If you owned the asset for less than one year before selling, this is considered short-term. The gain is taxed as ordinary income.

Should you reinvest capital gains?

Before you reinvest capital gains, you should bear this in mind to plan for your tax burden. If you sell stock and reinvest, you do pay taxes, assuming that you are making a net total profit. So you may want to set some money aside to meet your tax obligations. You may consider tax-loss harvesting and other tax minimization strategies.

How do you reinvest capital gains on stocks?

To reinvest capital gains, you’ll need to realize the gains by selling some or all of the stock. Then, you can use the profits to buy more stock, or bonds, or even a different type of asset like real estate. When do you pay capital gains tax on stocks? If you’re new to investing, you may be wondering — When do you pay taxes on stocks?