Another Tax Question

Example:

I have 10,000 SIRI shares that I obtained at $.10 which cost me $1,000
I sell at $.20, with a net profit of $2,000

Now if I re-buy with my $2000 (original $1000 investment plus my net profit $1000) at $.15, do I pay capital gains on the $1000 profit still?

Good question, i am interested in this answer also.

Yes the $1000 profit minus your commissions on buy and sell will be taxed at ordinary income if held less than 1 year.if held over a year it will either 10% or 15% dividend rate depending on your tax bracket...hope this helps..
P.S. their is a wash rule,but that only applies to losses,so you can't lock in losses for the year...the rule is if you sell at a loss and buy another like investment in the next 30 days or previous 30 days it is considered as if you never sold for the loss...Uncle Sam is great aren't they....LOL
But as always with tax ?'s check with your preparer...

So tax wise, it's "cheaper" to pull your profit out within a year of purchase right?

no, you must wait one year to not take the tax hit.

I was hoping there was a "wash rule" for profits too, oh well...:rolleyes:

Quote:

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Originally Posted by JohnnyIrishXM

Yes the $1000 profit minus your commissions on buy and sell will be taxed at ordinary income if held less than 1 year.if held over a year it will either 10% or 15% dividend rate depending on your tax bracket...hope this helps..
P.S. their is a wash rule,but that only applies to losses,so you can't lock in losses for the year...the rule is if you sell at a loss and buy another like investment in the next 45 days it is considered as if you never sold for the loss...Uncle Sam is great aren't they....LOL
But as always with tax ?'s check with your preparer...

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I thought that was 30 days. (the wash rule)

It is john.

IRS info

Here is a link to a previous post of mine.

Quote:

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Originally Posted by john

I thought that was 30 days. (the wash rule)

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Yes it is 30 days,good catch John,was thinking of something else...

Quote:

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Originally Posted by JohnnyIrishXM

Yes it is 30 days,good catch John,was thinking of something else...

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Ho and thanks for the scare, I appreciated it. I had to go back and take another look at that one, I thought maybe the tax rule changed and was going to have to worry about an IRS audit.