27

I had been pondering this recently myself too. This question motivated me to do a little research. It appears that what happens is that (take a deep breath) the capital gain does push you into the next tax bracket, but the capital gain is always interpreted as the "last" income you received, so that if your non-capital-gains income is less than the ...


19

You cannot get "your investment" out and "leave only the capital gains" until they become taxable at the long-term rate. When you sell some shares after holding them for less than a year, you have capital gains on which you will have to pay taxes at the short-term capital gains rate (that is, at the same rate as ordinary income). As an example, if you ...


17

Short Answer: You're going to end up paying taxes on it. Despite the home being your primary residence, you don't meet the ownership test, and it isn't noted that you have had a change in employment, health, or other unforeseen circumstances that are "forcing" you to sell. Otherwise, you could qualify for a reduced maximum exclusion that might allow you to ...


17

Assuming your investments aren't in any kind of tax-advantaged account (like an IRA), they are generally not tracked and you indeed may pay more taxes. What will likely change, however, is your cost basis. You only pay tax on the difference between the value of the investment when you sell it and its value when you bought it. There is no rule that says ...


15

Although an ETF trades like a stock, it is really a stock mutual fund. And like all mutual funds, when you invest there are two ways that you realize a capital gain. As you mentioned, you have a capital gain when you sell a stock for more than you purchase it for, so when you finally sell this ETF, you will have a capital gain if the value of the ETF has ...


14

I'm not sure where people keep getting this idea, but I see it come up a lot. Anyway, you pay capital gains taxes when you sell an investment that has appreciated. It makes no difference when/if you reinvest the money or what you invest it in. If you are afraid of the tax burden you can minimize it by: 1) Selling a stock that you have held longer than a ...


12

This image is an advertisement from a recent Barron's. The broker would want to put himself in the best light, correct? This shows you that of their current accounts, 53.5% are not profitable. And, keep in mind, these guys have the best track record of the list. Also, their client base isn't random. The winners tend to stay, so even if it were 50/50, the 50%...


12

There are two scenarios to determine the relevant date, and then a couple of options to determine the relevant price. Relevant Date If the stocks were purchased in your name from the start - then the relevant date is the date of the purchase. If the stocks were willed to you (i.e.: you inherited them), then the relevant date is the date at which the ...


11

Mutual funds (I expect this applies to ETFs as well) distribute all the dividends earned by the underlying investments to the share holders so as to avoid paying income tax (at corporate rates) on the earnings. Similarly, all capital gains due to selling some of the underlying securities, whether as part of the investment strategy of the fund (not a ...


11

Nothing of the data you provided (except for the current value) is relevant. You need to find the estate tax return filed on behalf of your grandfather's estate and see what was the value of the house in the estate. That would be your cost basis (unless your grandfather's cost basis is higher). Your capital gains will be calculated based on that. I'd ...


11

does it still count as a capital gain or loss? Yes. Is it essentially treated like you sold the stock at the price of the buy-out? Yes. Do you still get a 1099-B from your broker? Yes.


10

You can keep the cash in your account as long as you want, but you have to pay a tax on what's called capital gains. To quote from Wikipedia: A capital gain is a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price. It is the difference between a higher selling price and a lower ...


9

Gold ETFs are treated different than stock ETFs, as a collectable. This makes long-term investing in gold ETFs (for one year or longer) subject to a relatively large capital gains tax (maximum rate of 28%, rather than the 20% maximum rate that is applicable to most other long-term capital gains). Read the Investopedia article The Gold Showdown: ETFs Vs. ...


9

Edited in the light of comments and follow-on questions Your mutual fund manager buys and sells securities in pursuit of the investment strategies of the fund as well as to invest new money coming in and to pay out investors wanting to take their money elsewhere. This results in capital gains and losses for the fund. The net capital gain is taxable income ...


9

You normally only pay taxes on the difference between the sale price and the cost basis of the asset. In your example, you would probably pay taxes on the $10 difference, not the full sale price of $110. If you paid a commission, however, you would be taxed on your gain minus the commission you paid. Since you held the asset for less than a year, you wouldn'...


9

My question is... how is this new value determined? Does it go off of the tax appraised value? The tax assessors values are based on broad averages and are not very useful in determining actual home value. The most defensible valuation outside of a sale is a professional appraisal, real-estate agents may or may not give you reasonable estimates, but ...


9

This is explained at https://www.gov.uk/capital-gains-tax/rates There's no cliff-edge where your entire capital gain suddenly changes tax rate because you changed your income tax band. If on the basis of your income, you're a basic rate taxpayer, then you pay 10% CGT on any capital gains between your income and the top of the basic rate tax band. Then you ...


8

You should get a 1099-MISC for the $5000 you got. And your broker should send you a 1099-B for the $5500 sale of Google stock. These are two totally separate things as far as the US IRS is concerned. 1) You made $5000 in wages. You will pay income tax on this as well as FICA and other state and local taxes. 2) You will report that you paid $5000 for ...


8

In the US you specify explicitly what stocks you're selling. Brokers now are required to keep track of cost basis and report it to the IRS on the 1099-B, so you have to tell the broker which position it is that you're closing. Usually, the default is FIFO (i.e.: when you sell, you're assumed to be closing the oldest position), but you can change it if you ...


8

Assuming you bought the stocks with after-tax money, you only pay tax on the difference. Had you bought he shares in a pretax retirement account, such as an IRA or 401(k), the taxation waits until you withdraw, at which point, it's all taxed as ordinary income.


8

Please Note: Before taking any steps towards a transaction involving possible capital gains tax exclusions, please consult your CPA, attorney or tax advisor. I am not a CPA or Tax Advisor. Since you have only lived in it 11 months, you don't meet the "use test" for full exclusion. However, even if you haven't lived in it that long, you may be able to ...


8

Massachusets does no such thing. The 5.25% tax is only on realized gains. "Unearned" means "doesn't tie to your trade/business", i.e.: is not gained through your personal performance.


8

The reinvestment of dividends and capital gains is a very significant portion of investment gains over the years. This creates a compounding effect on your gains. You should almost certainly reinvest to help the account grow, until you are retired and want to withdraw some cash. Placing them in a money market account just builds a pile of uninvested cash.


8

It's worse than that. You'll be charged US tax on all of your income, capital gains and other. Depending on where you are living, the tax you pay in that other country may (or may not) be used to offset the tax you have to pay on your US tax return.


7

Capital losses offset capital gains. If you have long term capital gains - your short term losses will offset them. After that - total capital losses (if your gains are less than your losses) offset your general income up to a certain level ($3000 for a single person). If you still have losses remaining that are above that level - you carry them over to the ...


7

A 401(k) is tax-deferred. Rebalancing assets in a 401(k) is not a taxable event. In a taxable non-retirement account, you would figure out what investments have the best return after taxes. In a tax-advantaged account (like a 401(k), Roth 401(k), IRA, or Roth IRA) you simply figure out what investments have the best return. This is why some people advise ...


7

I usually start to answer a question of this type with "Don't Let the Tax Tail Wag the Investing Dog." But, it seems you are specifically asking about a 12/26 sale vs a 1/2 sale. And the fiscal cliff, to clarify, is not referencing the potential market moves that might occur if no agreement is reached, but with regards to the cap gain rate potentially ...


7

Forex vs Day Trading: These can be one and the same, as most people who trade forex do it as day trading. Forex is the instrument you are trading and day trading is the time frame you are doing it in. If your meaning from your question was comparing trading forex vs stocks, then it depends on a number of things. Forex is more liquid so most professional ...


7

How much Federal Capital Gains, NYS Income tax and local tax should I expect to pay? You're going to net about 2.4 millions of dollars. Federal long term capital gains tax is 20% (plus 3.8% medicare), NYS is 8.82%. Does it make sense to investigate the tax benefits of financing the sale for the buyer? Yes. Have your tax adviser check the options for you ...


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