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Over the last few months I've learned alot combing through message boards. I now am in the one most dreaded. (And apparently most needed)
Summary- I am 32, make about 40k/yr., own a small home, sole custodial parent of two minor children, have no work related tax deferred options and am inheriting a ton of money.
I have read time and time again that anyone with short term capital gains will be shot on sight by the IRS. So it seems to me that I should be buying and holding on at least an annual period. However, and this is what I need help in understanding, what exactly is the difference (in taxes) between long and short term capital gains?
From what I've read I gather that without tax deferred, exempt, IRA's-401K's ect. I stand to lose an enormous amount of money to the IRS, but the returns appear to be so much better trading on a monthly vs. yearly level. Assuming the return's are 10 to 25pts higher with a shorter turn over on trades, do you really lose enough to taxes to make an annual hold better? How?
If I made a 100k/yr trading monthly what would I pay in taxes as opposed to 100k/yr trading annually?
See, now I confused myself!
Hope you can set me straight, I really appreciate any and all offerings.
Thankyou in advance,
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