Generic tax question on capital gains.
 

How do US capital gains taxes affect ones ROI in a stock?

I buy X amount of shares of US stock Y as an individual.

a. I sell stock within that year for an ROI of 11%. What are the tax implications?

b. I hold the stock beyond the year i bought it but during that year it shows an ROI of 11%. Any tax implications for that year?

Additionally, how do US taxes affect mutual fund turnover within a given year? How does that affect the funds performance?

I apologize for my ignorance. If these questions are too vague or general I will specify. If they are nonsensical, please contribute anything helpful or insulting.

Re: Generic tax question on capital gains.
 

Sounds like a homework question...

You pay taxes on a stock during the year in which you sold it. If you bought it in `05, you don't pay taxes until you sell it in `07. Short term capital gains is less than a year and is basically ordinary income, long term is 15%.

Re: Generic tax question on capital gains.
 

i wish it was a homework question...would be nice to be back in school.

obviously i am totally ignorant to the tax implications on non-retirement fund investments.

here's what i really don't understand...i was reading Desertcat's debate w DS and DC mentioned a recent acquisition of his. Something about buying a stock at $1.8 and then selling it at $2.4 for X ROI. What i want to know is how capital gains tax (or any tax for that matter) affects the ROI in that transaction given the time from start to end was less than a year?

Re: Generic tax question on capital gains.
 

You don't consider taxes when computing your ROI per transaction. Do you consider taxes when you win $1000 at poker or do you think, "Wow, I booked a thousand dollar winner tonight!"?

Jimbo

Re: Generic tax question on capital gains.
 

this might give you a start on how to minimize your tax
http://www.investopedia.com/terms/t/...harvesting.asp
http://www.investopedia.com/articles/04/122704.asp

general
http://en.wikipedia.org/wiki/Capital...#United_States