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The way the IRS looks at it: You sold 50 s at $2 for $100. Each of those shares cost $1. So you made a profit of$1 on each share for a total gain of $50. So you pay capital gains on $50. You also have in your account 50 more shares that cost $50 which you hold and sel at a later date. if they fall below $1/s and you sell then you would have a capital loss.

Joe Varga
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