Tax question regarding selling stock

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dja4260

dja4260

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Long story short.

2 months ago I bought stock for $2200 online, using Ally. As of today, it's worth $7000 total including initial purchase of shares.


If and when I choose to sell:


Does length of ownership play a role in % taxed? Similiar to capital gains on a home (2 yrs)?

What precentage will I pay on gains?

What more info do you need?

FYI the stock is CVSI.
 
Whats your age what kind of account is it in? If you invest in a roth brokerage account you dont have to file any gains tax because that money in the roth has already been taxed.

If its just regular stock there's normally no limit to how long you have to hold the stock. Bond funds are usually something you have to keep a minimum of say 90 days.
 
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Originally Posted By: Oildudeny
Whats your age what kind of account is it in? If you invest in a roth brokerage account you dont have to file any gains tax because that money in the roth has already been taxed.


I simply opened a Ally account and linked my bank account. The money will be spent on a new HVAC system. I have seperate types of retirement. This is not one of them. It was a hunch and some play money that was sitting in my savings.
 
I would ask your tax advisor.. I'd say you'll have to pay a brokerage fee to sell the shares and most likely a tax form to add the $4,800 to your income at tax season
 
There are short term capital gains and long term. It's easy to look up on IRS or tax prep sites. They explain everything you need to know. The home 250/500k tax exemption by living in and owning a home for two years is not the same thing at all.
 
Originally Posted By: Sayjac
One year or less is a short term capital gain and you will be taxed at normal tax rate, ie., whatever your tax bracket rate is.

More than a year, taxed at qualified dividend income rate. 'Generally' less than short term cap gain. See link for more detail.

https://obliviousinvestor.com/capital-gains-and-losses-tax-short-term-and-long-term/



Above is correct, assuming a non retirement deferred account the term is one year for a LTCG and less than a year for a STCG. If a deferred retirement account (non Roth) it makes no difference, there is no gain or loss, your just have to start taking our the RMDs at 70 1/2 on whatever the balance is at each year end.
 
Nice score! As Sayjac said, it's taxed as normal income.

Next time you have a hunch, maybe you can share with your BITOG friends?
 
You will get to pay short term capital gains on them.
Those gains should be at your maximum tax rate that you pay on normal pay
But that is much better than having a loss

Enjoy the tax payment and the new HVAC system
 
There are ways in the same tax year to dump a loss to offset a gain. If something flops later this year things'll work out for you.

I'd have put the "play money" in an IRA so the taxes aren't an issue.

You might see if you can take a loan against this stock, so if it holds steady you can sell it in a year and get the better rate.

Though if I were in your shoes I'd cash out and pay the piper his 30% or whatever.
 
Based on what you said (sell within a year) it would be short term capital gain. I'm not sure how much you make so I don't know the tax percentage. Look up your tax bracket last year and see approx how much more you pay vs how much you make.

Make sure you deduct the cost basis (your purchase price + transaction fees on both buy and sell), the broker may not always report it and you don't want IRS to assume the cost basis is $0.
 
For the lower long term capital gains tax you need to hold it for 12 months or longer otherwise it is short term capital gains which is taxed as ordinary income, your tax bracket. Both short term and long term capital gains are first offset by the same losses if you have any. Many people do tax loss selling, they look for stocks which they want to get rid of, sell, and have a loss, then any gains, profits, are offset against these dollar for dollar.
 
Originally Posted By: eljefino
You might see if you can take a loan against this stock, so if it holds steady you can sell it in a year and get the better rate.


You means buying an option?
 
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Originally Posted By: JLawrence08648
For the lower long term capital gains tax you need to hold it for 12 months or longer otherwise it is short term capital gains which is taxed as ordinary income, your tax bracket. Both short term and long term capital gains are first offset by the same losses if you have any. Many people do tax loss selling, they look for stocks which they want to get rid of, sell, and have a loss, then any gains, profits, are offset against these dollar for dollar.




^^^This is very, very good advise if you have a stock with a loss, you could offset your gain completely if you had another stock with the same amount or greater of a loss. Any loss over the amount of your gain can be carried over to the next year until its completely used/written off. Stock, or securities loss is limited to $3000.00 per year maximum.



You may not buy back the stock you used for a loss for 30 days, I believe you can buy any stock you posted a gain without breaking securities exchange laws/rules.
 
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Originally Posted By: Sayjac
One year or less is a short term capital gain and you will be taxed at normal tax rate, ie., whatever your tax bracket rate is.

More than a year, taxed at qualified dividend income rate. 'Generally' less than short term cap gain. See link for more detail.

https://obliviousinvestor.com/capital-gains-and-losses-tax-short-term-and-long-term/




Correct, generally long term capital gains are taxes at 15%.
 
Originally Posted By: Leo99
Nice score! As Sayjac said, it's taxed as normal income.

Next time you have a hunch, maybe you can share with your BITOG friends?


I'm in no position to tell people what to do with their money. The farm bill has language regarding hemp & CBD oil. My uncle has a vested interested in a similar company and recommended that I buy. I bought 1014 shares @ $1.70 per share.

Recently, I got an amazing promotion, my wife has a healthy pregancy, and this stock. I rarely feel this lucky!

MY 2nd floor HVAC system is 22 years old. These funds will cover that expense in full as of now. It's an expense that I planned for when I purchased my home last year.
 
So, how long have you owned the shares of stock?

? share price today? Had to ask...



I have Apple at cost basis @ $48.00 per share, I'm not selling now!
 
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