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Capital gains taxes..

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Rawr

Gold Contributor
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Aug 12, 2007
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OK, so I am up overall on my investments this year, and since this is the first time I've started investing I have no idea how the taxation process works.
I know the broker will send me a form, but what do I do when I am filing. What % does Uncle Sam want? Is there a way to write off gains on my equipment - laptop..what else is there?

Big thanks to anyone who can explain this via this thread or PM.
 

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randallg99

Bronze Contributor
Aug 9, 2007
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OK, so I am up overall on my investments this year, and since this is the first time I've started investing I have no idea how the taxation process works.
I know the broker will send me a form, but what do I do when I am filing. What % does Uncle Sam want? Is there a way to write off gains on my equipment - laptop..what else is there?

Big thanks to anyone who can explain this via this thread or PM.



you got some good problems to deal with. I cant answer them and I dont think anyone on this forum should unless they are certified CPA.

but if you answer these questions, then you can probably get some good direction- you have differences in ways dividends, long term, short term gains are made either long or short positions. Did you make money or trade options or other derivatives? did you hold actual metal or metal holdings? any MLPs or partnerships? how long have you held the stocks? how many trades are made on monthly and/or annualized basis? any foreign holdings?

answering these will give a clear direction where you need to go...

feel free to Private message me if you dont want to divulge info publicly, but feel free to tell all so we can all learn...
 

biophase

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Jul 25, 2007
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You don't mention what the investments are in. But in general the capital gains tax rate is 15%. Anything held under a year is considered ordinary income and is taxed at your income rate. If it was real estate that you have sold, remember that there is a state tax also.

(edit: I just saw that this post is in the stocks section, so I'm assuming you're talking about stocks)
 

Rawr

Gold Contributor
Speedway Pass
Aug 12, 2007
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Hey sorry didn't get back to this earlier. I have read that if your income is less than (I think) 30-40k you don't get taxed. Mine definitely is.

My stocks were held for something like 3 months, and I traded about 8-10 times. Anything else just ask.
 

piranha526

Contributor
Aug 20, 2007
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Hey sorry didn't get back to this earlier. I have read that if your income is less than (I think) 30-40k you don't get taxed. Mine definitely is.

My stocks were held for something like 3 months, and I traded about 8-10 times. Anything else just ask.

Talk to an accountant (mine handles eveything for me). I understand what he is doing but I don't ever talk about taxes with anyone. It is wrong for a non-CPA to give advice in this field since laws and techniques change so often.
 

wesrosstx

PARKED
Sep 24, 2007
15
0
10
Dallas, Tx
I did my taxes myself and didn't have too many problems. If you were just trading in blue chips and only made a few trades then you should be able to figure this out with a little research. A year back, I made an error on my taxes in which I did not report short-term losses. After a letter back and forth, I called them and they helped me resolve the issue. It's not impossible to do simple stuff when it comes to taxes.

However, if you are making weekly trades or into more advanced stuff, I would follow the other posters advice and get an accountant.
 

barchetta7550

PARKED
Aug 14, 2007
13
0
12
MI
In law school right now, in basic federal tax, we're on the topic of Long Term Capital Gains, Long Term capital losses, short term capital gains, and short term capital loses. The tax code is a pain in the a$$ to understand.

The tax code when it comes to these topics is more like a dictionary. It gives you definitions rather then directions oh how to compute them.

The tax code has different brackets you fall in. Up to certain ammount you get taxed x% and so on.

I would recomend getting a CPA
 

Nate

New Contributor
Read Millionaire Fastlane
Sep 24, 2007
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Utah
I still love the idea of a flat tax. Same for everybody, but charged on all gains, short term, long term, whatever. I told my tax-preparer that and she got mad at me. I think that was just because it would get rid of a lot of her business. Heaven forbid we would simplify things and save everybody time and money.
 

royemunson

Contributor
Read Millionaire Fastlane
Jul 24, 2007
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SW Ohio
Just to chime in - I do taxes (not a CPA - unable to pass darn test thus far)
but am familiar with your situation.

If you have bought and sold less than one year and one day it is short term
gains (losses offset those gains to net out). You are taxed at ordinary rates (In the USA of course).

You should use a tax specialist, but will have to provide the dates and cost basis
of your entries. You will get a form and most brokers are good about this but not
all provide your cost (if they do then great).

This will be a schedule D form. Sometimes traders utilize a business, but without looking at the code/rules, I can't remember the requirements on this one.

There are some more questions to be asked and whether you are taxed at all
will depend on a number of other factors. I would have them prepared just to ensure
accuracy and whether or not you are taxed. Plus if you have withholding elsewhere you'll want to file to get that back if you are not taxed due to exemptions, deductions, credits, etc...

Joe
 

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