If you double your money thrice a year in the markets, how much do you have after 3 years?

[buddyboy]

tax would be on realized gains minus losses.

that being said if you're doubling up every 4 months you are more than likely realizing those gains.

short term cap gains are taxed at your personal income tax rate.

if this were your only income you'd have $70k of short term gains in year #1

taxes are progressive

so for a single filer the standard deduction is $6300
so take that away from the $70k

leaves 63,700 in taxable income

you'd pay 10% on the first 9275 = 927.50

54425

then pay 15% on the next 28,374 = 4256.10

26051

and then 25% on the balance = 6512.75

total tax on 70k would be $11,696.35

so the start of year 2 would be $68,303.65

year one: $10,000, 20,000, 40,000, 80,000
taxes $11,696.35

year two: $68,303.65, 136607.3, 273214.6, 546429.2
taxes: now this is getting tricky, because you have obamacare taxes and amt and all kinds of stuff figure a good 33% going to uncle sam or:

546429-(68303+6300)= 471826 taxable about 160k in taxes... plus you have to take into consideration paying estimated taxes every quarter or face a penalty, so that would erode into your balance.

year 3: $310,000, 620k, 1.24m, 2.48m

only a fool would make that kind of money outside of some kind of tax avoidance vehicle... an easy 40% would end up in taxes

 

[Defying]

:nosepicki

yall are some smart cookies

 

[RunMaker]

tax would be on realized gains minus losses.

that being said if you're doubling up every 4 months you are more than likely realizing those gains.

short term cap gains are taxed at your personal income tax rate.

if this were your only income you'd have $70k of short term gains in year #1

taxes are progressive

so for a single filer the standard deduction is $6300
so take that away from the $70k

leaves 63,700 in taxable income

you'd pay 10% on the first 9275 = 927.50

54425

then pay 15% on the next 28,374 = 4256.10

26051

and then 25% on the balance = 6512.75

total tax on 70k would be $11,696.35

so the start of year 2 would be $68,303.65

year one: $10,000, 20,000, 40,000, 80,000
taxes $11,696.35

year two: $68,303.65, 136607.3, 273214.6, 546429.2
taxes: now this is getting tricky, because you have obamacare taxes and amt and all kinds of stuff figure a good 33% going to uncle sam or:

546429-(68303+6300)= 471826 taxable about 160k in taxes... plus you have to take into consideration paying estimated taxes every quarter or face a penalty, so that would erode into your balance.

year 3: $310,000, 620k, 1.24m, 2.48m

only a fool would make that kind of money outside of some kind of tax avoidance vehicle... an easy 40% would end up in taxes

This man is a stud. But not sure how one would legally avoid taxes on this. What are some examples?


Other thing I don't understand is... how can you realistically pay taxes every quarter when you have positions that are constantly moving. What are you supposed to do? "Oh, it's the end of quarter one! Let's liquidate everything, assess the taxes, pay them for the quarter, now jump back into those positions?"

 

[packer2012]

You have to be talking Russie Bucks.

Go for it.

 

[Illini]

I think you tax guys are putting the cart in front of the horse.

 

[Illini]

I remember being a kid in my early twenties and had never been to Vegas or bet on sports. I played $5 blackjack occasionally at the local casino and was playing with this guy that bet sports. I was asking him about placing bets and taxation in Vegas. He was like "well kid, taxes are not a problem for all but a few sportsbettors."

 

[RunMaker]

It's been done before many times in the past and it will be done many times again in the future.

Tax wizards and accountant geniuses are happily welcomed for their feedback.

 

[Jstack34]

It's been done before many times in the past and it will be done many times again in the future.

Tax wizards and accountant geniuses are happily welcomed for their feedback.

If you make the money in a Roth IRA, it should be tax free capital gains if you withdraw after age 59.5 and had account open for 5 years. Roth IRA contributions are limited based on your AGI, but actually anyone can do a backdoor contribution as there is a loophole in the rules. Only problem is that Roth IRA contribution is limited @ like 5,500 per year or something like that.

 

[RenoChazz]

If you make the money in a Roth IRA, it should be tax free capital gains if you withdraw after age 59.5 and had account open for 5 years. Roth IRA contributions are limited based on your AGI, but actually anyone can do a backdoor contribution as there is a loophole in the rules. Only problem is that Roth IRA contribution is limited @ like 5,500 per year or something like that.

So do 5k one year 5k the next, then retire in style in 5 years.

 

[Illini]

So do 5k one year 5k the next, then retire in style in 5 years.

Who hasn't done that already? Hashtag late to the party fella. Hashtag OMG.

Only on the internet.

 

[buddyboy]

IRA's are for earned income, income derived from buying and selling stocks would be considered capital gains and not eligible for IRA contributions.

even if they were there are income limits...

the best possible scenario would be to have the 10k already in the IRA, then NO taxes on ANYTHING, until you start to withdraw funds, the idea for an IRA is to grow your money tax free then only pay taxes on the small percentage of the IRA you take out at a much lower tax rate.


the other way would be to pull a clinton or zuckerberg and create some kind of charitable trust or foundation.

the reason these guys with big money create or give to these foundations is because it's a big FU to the government. Instead of giving 40% to the IRS, they give it to a charity, it's always a charity that they have some say so with.

the clintons figured out that the system was set up to take 40% no matter what so they created an out with the clinton foundation. if hillary gets in office you'll see a ton of regulations being pushed by her office to increase the tax advantages to give to charities and foundations and a ton of regulation increasing the amount of tax paid by the rich... forcing the rich to give money to charities instead of paying taxes.

it'll slowly bleed the government until it cannot sustain itself

if you want to know what to invest in to make money, just look at where your tax dollars go... 43 million people get tax money to buy groceries, fighter jets and bombers are expensive, ....

everytime you see a rich guy on TV letting everyone know that he is going to give it all away... that guy is not talking to you, he is talking to our government, he is letting them know that they aren't gonna touch it and he found a way to keep it away from the government forever, it'll be spent on condoms and water wells in africa before the US government spends it on whatever they want.

 

[RunMaker]

IRA's are for earned income, income derived from buying and selling stocks would be considered capital gains and not eligible for IRA contributions.

even if they were there are income limits...

the best possible scenario would be to have the 10k already in the IRA, then NO taxes on ANYTHING, until you start to withdraw funds, the idea for an IRA is to grow your money tax free then only pay taxes on the small percentage of the IRA you take out at a much lower tax rate.


the other way would be to pull a clinton or zuckerberg and create some kind of charitable trust or foundation.

the reason these guys with big money create or give to these foundations is because it's a big FU to the government. Instead of giving 40% to the IRS, they give it to a charity, it's always a charity that they have some say so with.

the clintons figured out that the system was set up to take 40% no matter what so they created an out with the clinton foundation. if hillary gets in office you'll see a ton of regulations being pushed by her office to increase the tax advantages to give to charities and foundations and a ton of regulation increasing the amount of tax paid by the rich... forcing the rich to give money to charities instead of paying taxes.

it'll slowly bleed the government until it cannot sustain itself

if you want to know what to invest in to make money, just look at where your tax dollars go... 43 million people get tax money to buy groceries, fighter jets and bombers are expensive, ....

everytime you see a rich guy on TV letting everyone know that he is going to give it all away... that guy is not talking to you, he is talking to our government, he is letting them know that they aren't gonna touch it and he found a way to keep it away from the government forever, it'll be spent on condoms and water wells in africa before the US government spends it on whatever they want.

Another excellent post.

And I gather that there's no way to get around sending 40% off to Uncle Satan. Even at a couple hundred thousand for a small-timer there's likely no way around it, no? Or what are some ways to reduce that?

Also, how would you recommend going about finding a solid accountant for this?

 

[buddyboy]

they have it pretty much set up for you to be partners with the government.

in the real world you're not going to double up every few months, and you're not going to realize all gains or all losses.

you'd take some losses to offset your gains to lower your short term gains... i don't like taking short term gains unless they are BIG.

but really you can't concern yourself with tax implications, you just have to buy low and sell high, then figure out the taxes when the dust settles.

waiting 3 months for a 10k short term gain (4k in taxes) to turn into a long term gain (2k in taxes) could bite you in the ass, because in 3 months your 10k gain could drop and you'll net even less.

if given the choice to cash out a winning under bet in the first quarter for 60% of it's value or wait till the 4th quarter to get 80%... if you wait till the 4th Q you could lose it all

i've been investing since 1987, if you want investment advice get it from someone that is OLD and RICH... stay away from YOUNG... experience really does matter when it comes to investing.

if i had it to do all over again, I would only buy a handful of individual stocks, big name, dividend payers, the rest of the portfolio would be a total market index fund. I would only buy when the public is in full panic mode, TV news saying world is going to hell and markets may never recover... I would only sell when TV news is telling people that it's a great time to buy because the market is on fire.

 

[Jstack34]

IRA's are for earned income, income derived from buying and selling stocks would be considered capital gains and not eligible for IRA contributions.

even if they were there are income limits...

the best possible scenario would be to have the 10k already in the IRA, then NO taxes on ANYTHING, until you start to withdraw funds, the idea for an IRA is to grow your money tax free then only pay taxes on the small percentage of the IRA you take out at a much lower tax rate.


the other way would be to pull a clinton or zuckerberg and create some kind of charitable trust or foundation.

the reason these guys with big money create or give to these foundations is because it's a big FU to the government. Instead of giving 40% to the IRS, they give it to a charity, it's always a charity that they have some say so with.

the clintons figured out that the system was set up to take 40% no matter what so they created an out with the clinton foundation. if hillary gets in office you'll see a ton of regulations being pushed by her office to increase the tax advantages to give to charities and foundations and a ton of regulation increasing the amount of tax paid by the rich... forcing the rich to give money to charities instead of paying taxes.

it'll slowly bleed the government until it cannot sustain itself

if you want to know what to invest in to make money, just look at where your tax dollars go... 43 million people get tax money to buy groceries, fighter jets and bombers are expensive, ....

everytime you see a rich guy on TV letting everyone know that he is going to give it all away... that guy is not talking to you, he is talking to our government, he is letting them know that they aren't gonna touch it and he found a way to keep it away from the government forever, it'll be spent on condoms and water wells in africa before the US government spends it on whatever they want.

Yes, you take 5K of earned income and put it in the Roth IRA. You can have capital gains inside the Roth IRA that will be considered tax free when you take it out. There is no actual income limit to a Roth IRA because of the backdoor contribution

 

[Illini]

Anyone that can make 700% a year in the market can live in fucking Denmark and pay 70% and still be swimming in money that he could never spend.