TAXES ON PROFITS FROM INVESTMENTS HELD SHORT TERM?

I’ve looked up as well as down the play as well as cant find any aptitude with my issue. I’m removing in to trade some-more as well as some-more over the past integrate of months. Today for example I purchased 6500 shares of LJPC @ .28 as well as sole it all mins after @ .36 I done turn $400. I place trades similar to these may be twice the week if that. How most just does the Government pick up upon increase similar to this? Is it the set rate? averaged?

Tagged as: From, held, Investments, Profits, short, taxes, term

{ 5 comments… read them below or add one }

bostonianinmo October 2, 2010 at 6:32 pm: Short term gains (assets held for one year or less) are taxed as ordinary income. The rate depends upon your total income for the year and will vary from 0% to 35% depending upon your total income.

You report ALL sales on Schedule D. Keep meticulous records of your trading activity as you’ll need it to prepare Schedule D properly.
v b October 2, 2010 at 7:11 pm: Hint, keep up with those records at least weekly while you still remember what you were doing.

If your records are up to date (including notations for wash sales), it makes your tax return less of a hassle to fill out.

I would suggest that you get a copy of schedule D and the instructions since you do not seem to be familiar with it. IRS publication 550 may also be a good read for you.
lyong222 October 2, 2010 at 7:39 pm: I make over 500 trades a year, all short term, yes you are taxed normally. You better get familiar with Schedule D-1 and mine is maybe 15 + pages, so I have to create my own, page 3 thru whatever.
I’ve always been told do not consider taxes when investing. You going to miss out on a $400 profit trade because of the commissions and/or taxes? You SHOULD want to pay ALL the taxes you can which means you made a ton of trading profits.
Mathew October 2, 2010 at 8:12 pm: The net loss or gain for all of your trades in a given year is a very important factor in your tax return. The individual trades are reported on a Schedule D. Sales for stocks held less that a year are subject to ordinary income tax rates, those held longer than a year are subject to capital gains tax rates. You would be well advise to keep a spreadsheet of all your short term and long term sales to include the information necessary for the Schedule D (Description of stock, Date acquired, Date sold, Sales Price, Cost or Basis, Gain or (Loss)). A separate spreadsheet for your purchases with dates and costs including any commissions or other costs of sale or purchase would be very helpful when you are attempting to determine the cost basis down the road when you sell something. I know that some brokerage houses will provide all of this but it is nice to have your own records when it comes time to complete the schedule D.
michael971 October 2, 2010 at 8:49 pm: If you do this often, I would suggest getting some software for tracking your stock transactions. Then you could have it generate your schedule D. Maybe a version of Quicken or TurboTax for investors.

It will make your life so much easier at tax time.

TAXES ON PROFITS FROM INVESTMENTS HELD SHORT TERM?

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