Taxes on stocks earning

[Extraordinary_5]

How is it calculated? Let say you day trade a stock and profited more than 10,000, how will it calculated?

And if you keep the stocks for 10 years, do you have to pay taxes every year if there's a gain?

 

[LineTamer+]

Only pay tax on realized gain...which means you pay tax when you sell it.

Buy stock for 10 and sell for 15, you pay tax on the 5 dollar gain, only in the year you realize the gain (the year you sold it)

Capital gains tax is at 15% currently, but set to go up if the Dems take over in 2008

 

[PercocetThreat]

The only exception to what line tamer said is that the 15% Capital Gains Tax Rate is for long term gains (more than a year). Short term gains are taxed as ordinary income, so it varies depending what tax bracket you fall into.

 

[Extraordinary_5]

Well, 15% is not bad compare to gambling and lottery tax.

 

[D2bets]

Well, 15% is not bad compare to gambling and lottery tax.

15% is only for long-term capital gains. Long term means stock held more than one year. Shor-term gain is ordinary income.