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If i understand this right i owe taxes the amount of money earned on a stock when sold, correct? My broker will then send me a 1099 form on this, correct? I've read about tax deferred accounts, would that defer taxes until i withdrawl from the account? How do they work?
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[[If i understand this right i owe taxes the amount of money earned on a stock
when sold, correct? My broker will then send me a 1099 form on this, correct?]]

Your broker will send you a Form 1099B for the SELL end of the transaction only. You have the responsibility to determine your basis (or cost) in the stock for tax reporting purposes.

And yes, you will only pay tax on the realized gain on the sale of a stock when it is actually sold. You don't pay taxes on "paper" gains.

[[ I've read about tax deferred accounts, would that defer taxes until i withdrawl
from the account? How do they work]]

You can read more about IRA and Roth IRA accounts in the Taxes FAQ area. We also discuss these issues in the TMF Investment Tax Guide...you might want to check it out. You can also read more about tax deferred account in IRS Publications 590 and 560 at the IRS web site.

TMF Taxes
Roy

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