Jim Cramer?

Question

I have been following Jims Action Alerts plus portfolio which is only known to those who subscribe to it. The portfolio is up around 30% overall. He buys and sells often creating shorterm capital gains. Now my question is that if you are in a 25% tax braket meaning your short term gains are taxed at 25%, does than mean your actual gain is only 5% profit?

Answer 1

No, it means 25% of your gains will be taxed away.

You keep 75% of your gains.  That means your net profit after taxes is 22.5%.

Answer 2

It is not 30-25=5%. You basically multiply the 30% times .75. 25% of the gain would be lost to taxes, leaving 75%. 75% of 30 is 22.5%. Not a bad return when you compare it to the S&P 500 or DOW. Booyah.

Answer 3

Example: You invested $1000 & made 30% which is $300.  In a 25% tax bracket, you'll pay $75 to the taxman. So at the end of the transaction you are still left with $225 which is a 22.5% return.

Answer 4

No. If your tax rate is 25% it means for every 1000 of profit, you'll be liable for 250 in taxes, before deductions are computed/taxes submitted.

Answer 5

View It Now    FinanceExtends (dot) com

Answer 6

No, it means that 25% of that 30% gross capital gain will go to taxes.