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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??

Prikeenu
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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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Thank you very much for the information, it really puts it in perspective.
Do you know of an information source that would show a table of typical incomes and taxes associated with them to get a better idea potential tax liability?

Best Regards,

Prikeenu
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Do you know of an information source that would show a table of typical incomes and taxes associated with them to get a better idea potential tax liability?

Here's the link to the IRS website which will have an index for the actual tax tables. You can also look at the form 1040ES for 2000 which will give you information about the standard deduction and exemption. It would probably give you the most accurate way to precalculate your taxes.

http://www.irs.ustreas.gov/prod/index.html
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Hello,
I am also working abroad and have never had to pay income taxes. If I sold a short-term stock investment for only $3000/gain, would I still be charged the 30%(I think that is correct) tax? I will not have any other income to list.

It says I will be taxed at ordinary income rates on your my term capital gains. Your short term capital gains becomes your income for the various brackets. So, the $3000/gain will b e my income tax bracket? If so, I guess I wont have to pay taxes?

Thanks,
AE

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