Basics of Investing

Archive for July, 2006

Question: how exactly do you pay taxes on investments in the stock market?

i know that there is long term capital gains tax and short term capital gains tax. 35% for short term, 15 for long term, i believe. But what if you trade stocks as a job, and that’s how you make money? do you have to pay taxes again on the investment (income tax)?

Also, you have to hold a company for at least a year, but if you own a bunch of stocks, and trade different companies almost monthly, isnt that going to create a big mess for when you report your cap. gains tax?

Answer: The short answer is that it depends upon the technical classification of your job and how you organize your business. Either capital gains or “income” not both from a single transaction.

If you are organized properly is isn’t any more complicated than figuring out your profit and loss on goods bought and sold as a retail store or income derived from contractual labor subcontractor.

(My point is that accounting exists for a reason and good accountants get paid for real work)

Property Tax International – Protect Your Investment