Welcome Guest. Register Now!  


For 2014 Tax Tips For Year 2014.


 
 
LinkBack Thread Tools Search this Thread Display Modes
Prev Previous Post   Next Post Next
  #1 (permalink)  
Old 11-27-2014, 01:12 PM
Junior Member
 
Join Date: Nov 2014
Posts: 3
short term capital gains question

So I'm a little confused about short term capital gains. From what I've read you are taxed at the same rate as your ordinary income. So for example as I understand it if you were single and made $50,000 a year working for Delta Airlines and made $500 profit in short term capital gains you would pay 25% or $500*0.25=$125 to the IRS leaving you with a $500-$125=$375 profit from your investments after taxes.

But here is my question. What if you were totally unemployed for a whole year (every single day) and collected no unemployment benefits whatsoever from the government, but instead earned enough money to get by solely from short-term capital gains investments? Let's say you made $50,000 in total profits over the course of the year from short term capital gains investments, but that you didn't make enough trades to qualify as a trader. How much taxes would you owe on this investment? Since you didn't have a job would your ordinary income be considered $0 and would therefore fall into the 10% tax bracket such that you would owe $50,000*0.10=$5,000? Or would the $50,000 earned from your short term investments be considered part of your ordinary income in which case you would fall into the 25% tax bracket and would owe $50,000*0.25=$12,500? How would this work?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
 



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Do K-1 Losses offset Short Term Capital Gains? jvc714 For 2014 1 11-26-2014 03:40 AM
Accidently misclassified a capital gains transaction as short term rather than long term janelee Capital Gains 1 04-17-2014 06:50 AM
Capital gains question Neens27 Itemized Deductions 1 11-18-2013 11:34 PM
Long term capital gains rate for active trading LLC lukedog Limited Liability Company 1 09-22-2012 04:52 AM
Capital Gains on a Short Sale? 99980000 Capital Gains 0 04-08-2009 10:20 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.