fileing capital gains tax

[danny987]

how do you go about doing it? Me and my dad are interested in getting into stocks and neither of us has experience with capital gains tax. does it come directly out of your brokerage account or do you pay it whenever you file federal taxes? and im sure someone well dog on me telling me that i need to study alot more, and well thats what im doing.:rock:

 

[insomniac]

In January, your brokerage will send you a 1099 form showing what you sold during the past year. If you had held that stock longer a year, then you pay 15% of the profit on your income tax return due in April. If you held it less than a year, then you count it as income.

 

[danny987]

If you held it less than a year, then you count it as income.

if it counts as income what percentage well you get charged

 

[DrMetallica]

if it counts as income what percentage well you get charged

Marginal tax rate --- depends on your income level. Anywhere from 10 to 35 pc. Also know that u can only deduct $3.000,- py in excess of gains -- the rest is carryforward. Unless it's Sec 1244 qualified small-business stock, in that case u can deduct up to $53.000,- py and the rest is carryforward. But I doubt you'll have Sec 1244 if ur dealing with a broker.