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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.

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

TMF Taxes
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