Fri 11/16/2018 03:14 ET
DJIA25289.27209.900.83%TELCO167.960.790.47%GOLD1217.702.680.22%Shanghai2687.0419.080.71%
S&P 5002730.2028.941.06%BANKS448.538.791.96%OIL57.340.881.53%BITCOIN5581.4765.301.17%
NASDAQ7259.03124.861.72%PHARM580.584.240.73%US/EU1.140.000.00%Futures2728.006.550.24%
Welcome Stranger!  Please sign up or log in to enable additional features.Sign Up | Mail | Log In
Forum - Gurus Answer Questions    Gurus answer your questions about the art of trading.

Msg Top | Msg List | < Prev | Next > | Post New | Reply | Privately | Search
  
From: tommcclure (Rep: 0)Date: 11/06/2018 13:39
Forum: Gurus Answer Questions - Msg #649Thread #674046212 (Rec: 0)
Hi all! I Have a question about taxes on trades.

I am going to start trading. Not as much as a day trader, but I plan on being fairly active. Maybe a few trades a week or month.

I know I will pay short term capital gains on any profits. But I am not sure as to a certain situation.

Let's say I buy $1000 of ABC today and next week sell it for a $1500. That is a $500 profit and, if I stop there, when tax time comes I pay $500*.25 in taxes ($125). Simple enough.

But, what if I turn around and invest the entire $1500 in XYZ, and then sell it for $2000?

Do I now pay $500*.25 for each of these $500 profits?

I'm pretty sure that if my XYZ trade ended up losing $500, I could apply it as a loss, and it would be a wash--no taxes to pay on a $500 and a $500 gain.

But, I'm not sure of the two profitable trades, when the second trade uses the profits of the first trade.

Should I, after selling ABC for $500, put $125 aside to pay taxes with? This would mean that I would buy #1375 worth of XYZ.

I have a feeling it is less confusing than I am making it. Any help in seeing the light here would be greatly appreciated.

NOTE: This message was originally posted on 2018-11-06 11:16:31 by the tommcclure.



What would you like to do? Message: Endorse | Bookmark | Report AbuseUser tommcclure: Reward | Watch | Ignore

Msg Top | Msg List | < Prev | Next > | Post New | Reply | Privately | Search
  

TheLion.com | About Us | Agreement & Disclaimer | Privacy | Twitter
© 1999- TheLion.com, Inc.