How does selling stocks affect taxes?

Question

This is my 1st year trading, an I am wondering how this will affect my taxes??

Thank you

Answer 1

Your stock gains or losses are normally broken up into short term and long term capital gains. Short term are normally 1 year or less. Long term are greater than 1 year.

Short term rates are up to 35%.

Long term rates are 5% for taxpayers in the 10% and 15% tax brackets (zero percent starting in 2008)  

and 15% for taxpayers in the 25%, 28%, 33%, and 35% tax brackets.

According to the site below:

http://taxes.about.com/od/capitalgains/a...

Answer 2

The quantity of trades gives you more expenses to deduct from Gains. Remember what the Broker charge per trade is an expense to you.

Any profit is considered Capital Gains. Remember to keep records of your expenses incurred.

The link is the IRS. I read here often to stay on top of the game.

http://www.irs.gov/taxtopics/tc409.html

Answer 3

It is taxable if you make a profit.

Answer 4

Each sale transaction is a taxable event,  It is a gain, loss, or break even.

Answer 5

You only pay taxes on gains.  Depending on how long you hold onto them, you pay a different tax rate (short term capital gains are paid at the ordinary tax rate, while long term gains are paid at the long-term rate -- which is currently 15% in the US).  You may deduct trading costs as an expense.  You can offset gains with losses.

Answer 6

A closing transaction, such as selling a stock you previously purchased, creates a capital gain or a capital loss.

There is an excellent guide to taxes on capital gains and losses at

http://www.fairmark.com/capgain/index.ht...

Answer 7

All sell transactions are reported by your brokerage firm to the Internal Revenue Service since all gains (profits) are taxable events and must be included in the calculation of your tax liability.

Gains can be off-set by losses, but if you have net gains, you will increase your income which will increase you tax liability

Go to the IRS website and get a copy of a 1040 form instruction book, this will lay it all out for you