I put all my investment money in a managed account with Chase Private. The account is set up to reinvest all dividends, capital gain distributions and interests my stocks/mutual funds/treasury funds pay every once in a while.
I know the basic rules of federal taxation (interest is always ordinary income, dividends can be ordinary or qualified, etc.). Moreover, I know the fact that dividends becomes qualified also due to being held at least 60 days in the 121 days around the ex-dividend date.
So, right now, some dividends come from shares I bought months ago, while some dividends come from shares that were bought as reinvestment.
- Am I right in assuming that in this way some of the dividends will always be taxed as ordinary income?
- How can I properly calculate taxes (also to avoid backup withholding next year)?
- Do I need to truck each chunk of shares I bought for each security to understand which chunk gives qualified dividends and which one gives ordinary dividends?