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#1
06-30-2007, 10:46 PM
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Post deleted by Mat Sklansky
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#3
06-30-2007, 11:18 PM
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Post deleted by Mat Sklansky
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#4
06-30-2007, 11:28 PM
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Re: Capital Gains Tax
[ QUOTE ]
I would also like to know short term. all the info would concern a man who works at a firm in 70-90 K a year range. [/ QUOTE ] pretty sure all short term cap gains are taxed at the same rate as income tax. not sure if it affects your tax bracket (i.e. if you were in the lowest tax bracket in income, but you earn crazy cash through investment, ie 300k+ if you're taxed as if it was just added to your income.) more info on long-term cap gains (held for more than a year, to note, if you buy jan 1, 2007, you can sell earliest at jan 2, 2007 for long term cap gains rate to kick in, because they consider your hold date the next day after you buy) can be found here: wiki cap gains
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#5
07-01-2007, 12:22 AM
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Post deleted by Mat Sklansky
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#6
07-01-2007, 12:41 AM
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Re: Fed Income Tax on short term stock/options
short term is taxed as regular income tax (and yes, it can bump you up tax brackets).
long term is taxed at the long term capital tax rate, which is still 15%. [ QUOTE ] If I make 70K yr and lose 20K in the market can I report an income of +50K(FED) yr (legally)? Even if I was not a pro trader or even in a business close to stocks for primary income. [/ QUOTE ] You can offset $3k / year of capital losses. The losses can be carried forward from year to year. So if you have 20k in losses this year, you can offset $3k every year for 6+ years.
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#7
07-01-2007, 01:15 AM
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Re: Fed Income Tax on short term stock/options
[ QUOTE ]
short term is taxed as regular income tax (and yes, it can bump you up tax brackets). long term is taxed at the long term capital tax rate, which is still 15%. [ QUOTE ] If I make 70K yr and lose 20K in the market can I report an income of +50K(FED) yr (legally)? Even if I was not a pro trader or even in a business close to stocks for primary income. [/ QUOTE ] You can offset $3k / year of capital losses. The losses can be carried forward from year to year. So if you have 20k in losses this year, you can offset $3k every year for 6+ years. [/ QUOTE ] cap losses can't offset previous years or future years cap gains? ie if i lose 20k this year, and i had made 100k in the previous/following year, i can only deduct 3k? seems like an almost useless clause for people investing a lot of money.
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#8
07-01-2007, 02:48 AM
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Re: Fed Income Tax on short term stock/options
[ QUOTE ]
cap losses can't offset previous years or future years cap gains? ie if i lose 20k this year, and i had made 100k in the previous/following year, i can only deduct 3k? seems like an almost useless clause for people investing a lot of money. [/ QUOTE ] It's not useless. If you are investing large sums, it's pretty easy to have gains of over $17k next year.
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#9
07-01-2007, 08:19 PM
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Re: Fed Income Tax on short term stock/options
[ QUOTE ]
[ QUOTE ] cap losses can't offset previous years or future years cap gains? ie if i lose 20k this year, and i had made 100k in the previous/following year, i can only deduct 3k? seems like an almost useless clause for people investing a lot of money. [/ QUOTE ] It's not useless. If you are investing large sums, it's pretty easy to have gains of over $17k next year. [/ QUOTE ] right but you can only deduct 3k of it for that one year, no? or am i understanding the exact tax law incorrectly?
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#10
07-01-2007, 08:32 PM
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Re: Fed Income Tax on short term stock/options
[ QUOTE ]
[ QUOTE ] [ QUOTE ] cap losses can't offset previous years or future years cap gains? ie if i lose 20k this year, and i had made 100k in the previous/following year, i can only deduct 3k? seems like an almost useless clause for people investing a lot of money. [/ QUOTE ] It's not useless. If you are investing large sums, it's pretty easy to have gains of over $17k next year. [/ QUOTE ] right but you can only deduct 3k of it for that one year, no? or am i understanding the exact tax law incorrectly? [/ QUOTE ] [ QUOTE ] You can offset $3k / year of capital losses. The losses can be carried forward from year to year. So if you have 20k in losses this year, you can offset $3k every year for 6+ years. [/ QUOTE ] My understanding of this is that you can deduct any amount of losses up the the amount of your capital gains, then $3k more. So if you have $50k in capital gains (positions where you made money) and $100k in capital losses (positions where you lost money), you report $50k in capital gains, deduct $50k in losses against that (for a net of $0), deduct $3k against ordinary income, then carry forward $47k in losses to the next year. Next year, if your wins and losses were reversed for +$100k and -$50k (net +$50k), then you would report $100k in gains, deduct the $50k in losses, and deduct the remaining $47k that you carried forward from the previous year. The result is you would pay taxes on $3k of capital gains for the second year. The results net out to zero, as you would expect. You had a total of $150k in gains, $150k in losses, paid taxes on $3k of gains, and got a $3k deduction against ordinary income. The short version is that, if my understanding is correct, your losses that you carry forward are not just taken as a deduction $3k at a time. You use them as a deduction against future capital gains.
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