Investor Help (NO Ihub questions)

[cintrix]

If you trade out of a retirement account you don't have to pay capital gains. If you trade out of a non-retirement account you are subjected to short and long term tax on gains.
Short term is anything under a year and you pay higher on them depending on your income. It goes by your tax bracket - could be anywhere from 10-39.6%.
Long term is anything over a year and they too are based on your tax bracket but are taxed at a lower amount - usually around 15-20% - but you would have to look it up according to your bracket.
State taxes apply too but it depends on the state - some states are higher than others and some don't charge tax on capital gains.

You can also deduct losses. Married is 3000 per year. So if you have losses of 5k in a year you may only deduct 3k of it. But the extra 2k will be carried over to next year where you may use it. Also you can use as many losses against gains as long as the bottom line isn't over 3k. So say you had 35k in gains and 25k in losses from a previous year that you were carrying over. You could use the entire amount of the carryover since it is lower than your gain.Your actual gain would be reduced to 10k and you would be able to take the 3k loss and carryover the extra 7k for the following year.