How do you avoid paying heavy taxes on stock gains??

[Accipiter22]

Ok, so let's say I had 3,000 in my TD account. Now through several trades I've got 10,000. So I made 7,000. How much do I stand to lose on taxes, and how can I reduce this amount that I'd lose? I don't want to lock up that money, I'd like to keep investing that 10,000 over and over again so I keep accumulating money. Any suggestions?

 

[Feldenak]

I'm no financial planner but I say take the money and run to Mexico.

 

[Reel]

I believe a good way to avoid paying heavy taxes on gains is to incur losses. Good luck!

 

[Golgatha]

No one ever went broke paying taxes on gains. You can limit your taxes by continuing to make money on that $7,000 this year by filing at the last minute. No need to pay Uncle Sam until the 15th of April I always say.

 

[krunchykrome]

Don't realize them.

 

[toolboxolio]

Someone is actually gaining money these days?

 

[SacrosanctFiend]

Originally posted by: toolboxolio
Someone is actually gaining money these days?

Lots of smart/lucky people, or people with smart/lucky brokers, are.

 

[Accipiter22]

Originally posted by: Golgatha
No one ever went broke paying taxes on gains. You can limit your taxes by continuing to make money on that $7,000 this year by filing at the last minute. No need to pay Uncle Sam until the 15th of April I always say.

that's an idea actually

Originally posted by: krunchykrome
Don't realize them.

quick explanation of this?

Originally posted by: toolboxolio
Someone is actually gaining money these days?

my trades aren't affected (effected??) by market downswings, or upswings for that matter.

 

[ElFenix]

if there are some losses that you have to take, those losses would offset the gains.

also, if you've held it long enough it becomes long term cap gains with favorable tax rates.

don't realize means don't sell the asset.

you could also go to a US embassy and renounce your citizenship.

 

[toolboxolio]

Originally posted by: SacrosanctFiend

Originally posted by: toolboxolio
Someone is actually gaining money these days?

Lots of smart/lucky people, or people with smart/lucky brokers, are.

I knew I shouldn't have stayed with a broker that has a gambling addiction.

 

[krunchykrome]

Originally posted by: krunchykrome
Don't realize them.

quick explanation of this?


Don't sell them. When you sell them with a gain, those gains have been "realized" and realized gains are taxed. When you do not sell those "gains", those gains are not realized, and you are not taxed on unrealized gains.

 

[kranky]

Originally posted by: Accipiter22

Originally posted by: krunchykrome
Don't realize them.

quick explanation of this?

He means that you don't owe any tax on profits until you sell (when you "realize" your gains). Buy and hold lets you defer any taxes until you eventually sell. If you buy/sell frequently, you can't avoid the taxes.

 

[SacrosanctFiend]

Originally posted by: toolboxolio

Originally posted by: SacrosanctFiend

Originally posted by: toolboxolio
Someone is actually gaining money these days?

Lots of smart/lucky people, or people with smart/lucky brokers, are.

I knew I shouldn't have stayed with a broker that has a gambling addiction.

Well, at least he didn't have a penchant for 10-year-old Filipino boys.

 

[Aharami]

what Id like to know is what stocks you invested in

 

[Vic]

You make a like-kind reinvestment.

 

[Accipiter22]

Originally posted by: ElFenix
if there are some losses that you have to take, those losses would offset the gains.

also, if you've held it long enough it becomes long term cap gains with favorable tax rates.

don't realize means don't sell the asset.

you could also go to a US embassy and renounce your citizenship.

unfortunately I already sold them....So I guess it's off to the embassy?

So if I'm understanding correctly: I made 7,000 now if I purposely invest in a stock that tanks, say even by 1000, I'd still be up 6,000 and could count those losses against taxes I would owe?

 

[Accipiter22]

Originally posted by: Vic
You make a like-kind reinvestment.

so if I reinvest it into other stocks I won't have to pay on it?

 

[KoolAidKid]

Originally posted by: Accipiter22

Originally posted by: ElFenix
if there are some losses that you have to take, those losses would offset the gains.

also, if you've held it long enough it becomes long term cap gains with favorable tax rates.

don't realize means don't sell the asset.

you could also go to a US embassy and renounce your citizenship.

unfortunately I already sold them....So I guess it's off to the embassy?

So if I'm understanding correctly: I made 7,000 now if I purposely invest in a stock that tanks, say even by 1000, I'd still be up 6,000 and could count those losses against taxes I would owe?

You are correct in that your losses would reduce your taxable gains by $1k, but no one in their right mind would deliberately take a $1k loss to avoid $350 in taxes.

 

[TreyRandom]

Originally posted by: Accipiter22
unfortunately I already sold them....So I guess it's off to the embassy?

So if I'm understanding correctly: I made 7,000 now if I purposely invest in a stock that tanks, say even by 1000, I'd still be up 6,000 and could count those losses against taxes I would owe?

soooo... you're willing to lose $1000 to avoid paying taxes on that $1000? (You'll still be liable for taxes on the other $6000 you gained.)

Tell you what. Invest in my company for $1000 (or the entire $7000, preferably), and I'll be sure you lose it all so you don't have to pay taxes on it. :thumbsup:

 

[Accipiter22]

Originally posted by: KoolAidKid

Originally posted by: Accipiter22

Originally posted by: ElFenix
if there are some losses that you have to take, those losses would offset the gains.

also, if you've held it long enough it becomes long term cap gains with favorable tax rates.

don't realize means don't sell the asset.

you could also go to a US embassy and renounce your citizenship.

unfortunately I already sold them....So I guess it's off to the embassy?

So if I'm understanding correctly: I made 7,000 now if I purposely invest in a stock that tanks, say even by 1000, I'd still be up 6,000 and could count those losses against taxes I would owe?

You are correct in that your losses would reduce your taxable gains by $1k, but no one in their right mind would deliberately take a $1k loss to avoid $350 in taxes.

true

 

[dquan97]

if the funds were in a Roth IRA, the gains would've been tax-free

 

[SacrosanctFiend]

Originally posted by: dquan97
if the funds were in a Roth IRA, the gains would've been tax-free

And how long would gaining seven grand in a Roth IRA take from a base of three grand?

 

[Golgatha]

Originally posted by: dquan97
if the funds were in a Roth IRA, the gains would've been tax-free

I would highly suggest the OP take $4,000 and start up said Roth IRA this year to defer any taxes made on that original $4,000.

 

[FP]

Originally posted by: Accipiter22

Originally posted by: KoolAidKid

Originally posted by: Accipiter22

Originally posted by: ElFenix
if there are some losses that you have to take, those losses would offset the gains.

also, if you've held it long enough it becomes long term cap gains with favorable tax rates.

don't realize means don't sell the asset.

you could also go to a US embassy and renounce your citizenship.

unfortunately I already sold them....So I guess it's off to the embassy?

So if I'm understanding correctly: I made 7,000 now if I purposely invest in a stock that tanks, say even by 1000, I'd still be up 6,000 and could count those losses against taxes I would owe?

You are correct in that your losses would reduce your taxable gains by $1k, but no one in their right mind would deliberately take a $1k loss to avoid $350 in taxes.

true

How long did you hold the stocks before you sold?

 

[FoBoT]

hold them longer so you pay long term cap gains instead of short term

and you have to pay taxes when you make money , so get over it