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Old 01-30-2009, 11:41 AM
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Stock Gain/loss

I'm a student but I also do some day trading with stocks. When I report the gains I made, do I report (amount I paid) - (amount it sold at) and then based on the result, the tax?

For example, I do trades but on average I'll make say 50-100, I only pay tax on that gain of 100 on the trade? right? Or do I have to pay tax on the entire 10,000 trade, even though i only gained 100 out of it. thanks.



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Old 01-30-2009, 12:02 PM
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You only pay tax on the gain that was made on each transaction. Basically, you aggregate all the gains or losses on all the trades. Then, if the net amount is a profit, (known as capital gain), then you pay tax on that amount.

But, you might want to check with your Tax adviser to determine whether or not you eligible for "Zero capital gains tax rate for the year 2008! Hence, you might not even have to pay ANY CAPITAL GAINS TAX at all!

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