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Thread: Another Tax Question

  1. #1
    Gallep is offline
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    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?

  2. #2
    imromo24 is offline
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    Good question, i am interested in this answer also.

  3. #3
    JohnnyIrishXM is offline
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    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...
    Last edited by JohnnyIrishXM; 03-31-2009 at 05:14 AM.

  4. #4
    Gallep is offline
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    So tax wise, it's "cheaper" to pull your profit out within a year of purchase right?

  5. #5
    imromo24 is offline
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    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...

  6. #6
    john is offline
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    Quote Originally Posted by JohnnyIrishXM View Post
    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...


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

  7. #7
    Newman is offline
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    It is john.

  8. #8
    Newman is offline
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    IRS info

    Here is a link to a previous post of mine.

  9. #9
    JohnnyIrishXM is offline
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    Quote Originally Posted by john View Post
    I thought that was 30 days. (the wash rule)
    Yes it is 30 days,good catch John,was thinking of something else...

  10. #10
    john is offline
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    Quote Originally Posted by JohnnyIrishXM View Post
    Yes it is 30 days,good catch John,was thinking of something else...

    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.

  11. Ad Fairy Senior Member

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