capital gain tax on stock?
I’ve been using fidelity to trade stock for a year since around Feb in 2008, I put around $3400 in my account thorough out the year and profit about $700 from buying and selling stock for a few times, I also received $6x divident(I dont’ know how it’s derived because I don’t hold the stock for a year, I just buy and sell in a short period(usually within months). I have some questions:
1.Is the commission included tax or the tax is charged when I buy/sell stocks?
2.how do I do with the tax file thing in tax season , I have no idea and I never do it before, I;m a permanent resident(green card holder). Is it a kind of tax return that I file for money back?
3.what if I don’t file for capital gain tax?
4.what is the best way to save on tax for stock trader( usually 10-15 trade in a year)
thank you so much I appreciate it!!
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about 1 year ago
The tax codes are MUCH too complicated even for professionals. The good ones work pretty much full time just keeping up with all the changes in regulations that come out every year. With such complexity in the rules, and with so much at stake (fines, penalties, and possible prison), why would you think you could get reliable answers at a place like YA??
about 1 year ago
You must report all the stock sales on schedule D (Form 1040). Ordinary dividend is reported on schedule B (Form 1040). You can download 1099 from your broker site.
On 1099, you will see that your cost includes commission paid by you and your sale price in after deducting commission paid by you.
Read http://taxipay.blogspot.com/2008/04/list-of-articles.html
about 1 year ago
If you do not file the stock sales, the IRS will assume you paid $0 for the stock, recalculate your income to include all proceeds and bill you for the tax, penalty and interest, but will take 12-18 months to do so.
There’s nothing magic. You do a schedule D and d-1 (when you need more space), showing all sales on line 1. You show the proceeds and basis. The dividends go on the dividend line of the 1040 (line 9a).
Note if you sold at a loss and then rebought the stock, you may have to postpone taking the loss.