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Tax question on profits made selling stocks?
If I buy stocks for a total of 1700 dollars and I sell them six months later for 18500 dollars with a profit of 1500 dollars. Am I taxed on the whole 18500 dollars or just the 1500 dollars that I made? What if I reinvest it right away into another stock?
7 Answers
- Wayne ZLv 78 years agoFavorite Answer
Only your net gain from the sale is taxed and not the entire amount.
Buying another stock immediately is irrelevant. You are taxed on the gain regardless of what you do with the money.
- Anonymous8 years ago
The sale is the key. A sale must be reported on the tax return. What you do with the money is not a consideration.
You get taxed on the gain of $1500.
- JudyLv 78 years ago
Do you mean sold for 1850?
You're taxed only on gain. The IRS doesn't care what you do with the money. Investing it in another stock, even if you do it immediately and never actually get the money from your broker account, doesn't change anything, the gain is still taxed.
- troLv 78 years ago
this sale will be reported to you on a 1099 B and you will report it on form 8949 and Sch D, if you made a profit from the purchase price and the amount you sold it for this will be taxable
it will be taxed as ordinary income since it did not occur one day after 1 yr
what you do with the proceeds is up to you, you sold it, it is taxable if you profited
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- ?Lv 45 years ago
In shares there are 2kinds of profits1st is long run capital acquire & 2nd one is short term. Way when u bought some shares & preserve them for more than an yr & then sell..Its long term & when u purchased & offered inside 1 year its short time period. In long term cap.Achieve there is not any tax however for brief time period there will likely be tax.
- Richard AndersonLv 68 years ago
Your numbers are wrong. If you paid $1,700 and sold for $18,500, you made a short term profit of 16,800. That is what you pay tax on. You pay the tax even if you immediately re-invest the money.
- 8 years ago
It depends on your scenario.
If it's the only income you've made from trading, it won't be. But the reason(s) it won't be is due to the standard deduction and personal exemption. (Think of it as a tax-free ~$10K shield.)
Once your investing (short-term capital gain) income exceeds ~$10K, then it will be taxed (at the lowest bracket %).