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<<Well, it isn't a stupid question, I just know nothing about taxes. I'm a college student and usually my father does them for me.>>

Then you might want to pick up a copy of The Motley Fool Investment Tax Guide 2000 for some education. Never too young to learn.

<<My question concerns the short term vs. long term capital gains tax.>>

There is no "capital gains tax"...there are tax rates for certain type of income. This is a distinction with a big difference. But let's move on.

<< I have less that $10,000 a year in taxable income. Is there that big of a difference between the long term and short term cap gain tax rates?>>

I believe so, yes. I would GUESS that your normal tax rate would be 15%...which would also be the rate for your short term gains. Long term gains would be taxed at 10%. That's a 33% increase in taxes paid.

If your gains are large, you might get thrown up into the next tax bracket...the 28% bracket. If that's the case, your short term gains would get taxed at 28%, and your long term gains at 20%. This is a 40% increase in tax.

They both seem significant to me.

<< I have been thinking of adopting a more active trading style, and I was wondering if it is worth it as far as additional taxes and commisions go.
Thanks.>>

Your call. You can read more about these issues in the Taxes FAQ area.

TMF Taxes
Roy
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