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I'm relatively new to investing, and I'm an II and SA subscriber, but I have a question related to taxes that up to this point in my life I've never had to deal with. Any explanation/advice would be helpful.

As far as capital gains are concerned, how do you figure out on what amount you owe tax? Is it the price you sold the stock for minus what you paid for it, or is it on the full amount of the sale? Also, what if I sold a stock this year that I bought last year? Does the same answer still apply?

Generally, it's the sales price less the purchase price, but there can be various events that also affect the taxable amount. If you owned the shares for up to one year, the gain is taxed at ordinary income tax rates; more than one year, the gain is taxed at a maximum of 5% or 15% depending on your other income. Other than that, it doesn't matter what year you purchsed the stock.

Finally, in the same way that you're allowed to contribute to an IRA up to April 15th of the current calendar year for tax considerations of the previous year, can you do the same with capital gains/losses? That is, if I sold a stock this year (up until April 15) that I bought last year, for a gain, can I apply the tax on the gain to my 2006 return, or do I wait and apply it next year to my 2007 return?

No. Sold in 2007, taxed in 2007.

You should probably spend some time over in the FAQ area to the right. --->

You also might want to read the relevant sections of IRS Pub. 17, Your Income Tax, and the instructions to Schedule D, Capital Gains. Both can be found at the IRS web site,

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