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How to Calculate Cost Basis in Dividend Reinvestment Plans

By Motley Fool Staff – Updated Jun 9, 2025 at 12:29AM

Key Points

  • Reinvest dividends to buy more shares; consider tax when selling shares accumulated via DRIPs.
  • Dividends received outside IRA are taxable, increasing your stock's tax basis over time.
  • Track cost basis annually by recording taxed dividends, adjusting original share purchase prices.
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