I am new to trading and am currently researching a few different stocks. But I wanted to ask, do you pay a capital gains tax on all profits made when you sell a stock. And where can you go to find information on taxes and stocks? Thanks
Posted by Machiavelli on :
This site will help you and you should also consult your accountant:
Thanks Mach, Im still not getting one thing though, is a 1099 prepared each time you make a sale? Because for some people who are trading alot, this could make accounting difficult. The way I understand it is, if I invest 1000 and double it and sell, the 1000 profit is subject to short term capital gains tax, but is this true if I take the profit and reinvest it somewhere else?
Posted by PCola77 on :
I think the basics are like this:
You get a 1099 from each broker at he end of the year. Simplified, it has total cost and total proceeds, and you pay taxes on net proceeds.
You are right that if you made $1,000 it would be subject to taxes. But if you reinvested it and lost all $1,000, your net gain for the year would be $0, and you would owe no tax.
If you made $1,000 more on the second transaction, you'd owe taxes on $2,000.