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Financial Planning / Tax Strategies


Subject:  Re: Foreign Earned Income vs. Capital Gains Date:  11/1/2000  5:54 AM
Author:  RooCat Number:  41396 of 129794

I have worked aboard for 9 years and have never had to pay income taxes. If I had a stock investment that I traded on every month how would uncle sam asses my tax bracket to determine the amount of capital gains tax to collect??

If you only have short term capital gains other than your exempt foreign earnings, you are taxed at ordinary income rates on your short term capital gains. Your short term capital gains becomes your income for the various brackets. Uncle Sam does not normally assess income taxes unless you don't file your return which is not advised. You are required to file the appropriate income tax return including the necessary schedule D and form 1040. There might be a more complete discussion of taxation of only capital gains in the Tax Strategies FAQ which could help you understand this more thoroughly.
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