Am I taxed on stock i sold even if I didnt take the money out of the account?

I sold some stock the past couple of years and was told by mt tax preparer that I would not be taxed since the profits stayed in my brokerage account. Now they tell me that I am taxed on the sale of stock whether its in the account or I take it out. Which is true?
Am I taxed on stock i sold even if I didnt take the money out of the account?
Yes you are taxed. Those government vehicles need that expensive gas also.
Reply:You need a new tax preparer, that's what's true, unless the amount is in a tax-deferred retirement account like an IRA.





When you sell, the transaction is reported to you and you report the transaction on a schedule D, no matter what you did with the money from the sale. If this has been going on for a couple years, I'm surprised you haven't heard from the IRS already.





But if the money is in an IRA, then your tax preparer is right, you don't report it or pay tax on the gain until you actually take it out. If it's just in a regular brokerage account, then you do.
Reply:You got bad advice from your tax preparer.
Reply:Unless the stock was in a qualified retirement account (IRA, etc.) the year you sell "any" stock you are taxed on any difference between the sell price minus your cost basis (which includes original price, any dividends already taxed that were automatically reinvested in that stock, and proper accounting of trade fees). However, that can be confusing because in the past, brokers only reported sales and not cost basis on the 1099-B, and that might be gross (not including trade fees that add to your cost basis) or net with trade fee already deducted from sale price. It was up to you to properly account for your cost basis on your Schedule D, so the IRS would not think you owed tax for the entire sale amount. If after all buys/sales in a year you ended up with a loss, up to $3000 of that can be deducted from your income, but only in a taxable account.





Now some brokers are starting to include cost basis with the 1099-B info sent to you after the end of the year. But if they do not, you need to check your account history or old statements to see what you actually paid for the stock and any trade fees that were not automatically deducted.





So if the stock trades were in an IRA, Roth IRA, etc., it is nothing to worry about. But if the brokerage account was a taxable account, you should be concerned whether capital gains or losses were properly reported. If not, you may receive a letter from the IRS someday.
Reply:Yes you are but on the profits. Sales price - cost = taxable amount.
Reply:You are taxed on any capital gains you have from selling stock (at a profit). This can be offset by capital losses in the same year. You can only deduct the gains from dividends that are reinvested in your investment account - I believe this is where the confusion was.
Reply:You are taxed on the sale of stock whether its in the account or you take it out.