I currently have several different stocks some that I plan on selling off as I build my foolish portfolio. Using the Motley Crew's Investment strategy, how can you minimize tax on capital gains if your selling stock on a fairly regular basis??
The rude answer is to have a low income. The second rude answer is to make a bunch of bad investments that result in capital losses, so that you can balance your gains against them.Otherwise, you are stuck. If you have a short term gain because you have held the stock less than a year and a day, then it will be taxed as ordinary income: most probably at 28%, but more if you are a rich person. If you hold longer and it is a long term gain, it will most probably be 20%.
[[ I currently have several different stocks some that I plan on selling off as I build my foolish portfolio. Using the Motley Crew's Investment strategy, how can you minimize tax on capital gains if your selling stock on a fairly regular basis??]]The ONLY way to reduce your taxes on stock sales would be to hold them for more than one year. If you do, you receive long term holding preferred tax rates. If you short term trade, any gains would simply be ordinary income, taxed at your marginal tax rate.You can read more about this in the TMF Investment Tax Guide. You might want to check it out.TMF TaxesRoyWant to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. It'll help you with your 1998 taxes, and it's never to early to start planning for your 1999 taxes. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
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