Stock trading and taxes 861


One of the advantages of trading stock in an individual retirement account is that you may be able to postpone taxes. Due to the tax structure of IRAs, you may end up paying a higher tax rate on your stock trading than you would if you had kept your stocks in a regular investment account. Current TaxesAn IRA is a tax-advantaged retirement account. Any investment gains you earn in an IRA are not immediately taxable.

When you sell stocks and make money on the transaction, you must pay tax on your gains. However, the amount of tax may vary, depending on when you buy and sell. Stock trading and taxes 861 some stocks, you pay capital gains tax. On others, you pay the same rate as your regular income. Long-term GainsFor stocks you own for longer than a year as of October 2012, you pay a maximum tax rate of 15 percent. You must keep track of the purchase date and the selling date for all of your stocks, so that you can be sure whether you qualify for the long-term tax rate.

Short-term GainsIf you hold a stock for a year or less and sell it, you pay the sh.




Stock and taxes 861 trading

Stock trading and taxes 861