Stock Markets Exposed

Is it true that i have to pay taxes to the IRS when i make money on the stock market?

What percentage of my gains would the IRS ask for? I just posted this question and i got a few answers telling me that it depends on my tax bracket. My case is I am a fairly young guy and I have been an unemployed full-time student for the last 3 years. I just took $10,000 in cash from my credit card company so i can make some short term (3-9 months) profits. So does that mean i don't have a tax bracket? Am i still gonna pay taxes?

Public Comments

1. Yes, it is called capital gains and losses. Capital gains result from selling a capital asset -- stock, bond, mutual fund, apartment building, diamond -- for more than its "basis." For most people, basis is what they paid for the asset, including transaction costs. You pay taxes on the gain or profit. If you sell a stock for a profit in a year or less, you get a short-term gain, which is taxed at your regular tax rate. If you have owned a stock for more than a year, you can sell it and pay taxes up to a maximum of 15%. The rate depends on your taxable income. The lower capital gains rate (which applies to taxpayers in the 15% bracket or lower) is zero percent this year
2. Generally, you will owe taxes on gains from profits (but those profits might be offset by deductions, tax credits, etc.). Generally, gains fall into two categories: short term long term short term gains are those profits from stocks held less than 1 year and are taxed at the normal income rate (around 26%) long term gains are those profits from stocks held longer than 1 year and are taxed at around 15%. btw - if you can make a profit in this market... more power to you. And good luck.
3. Capital gains and dividends are taxable income. By the way, investing with borrowed money is very risky.
4. Here are the tax brackets http://www.moneychimp.com/features/tax_brackets.htm And this is what you pay for short and long term gains according to your tax bracket. Held one year or less is taxed at your tax bracket. Long term gains are capped at 15 percent. Held more than one year 5% for taxpayers in the 10% and 15% tax brackets (zero percent starting in 2008) 15% for taxpayers in the 25%, 28%, 33%, and 35% tax brackets
5. 96% of the people that try trading.... fail. Most successful traders take three or more years to learn this skill. With the VIX at over 40 and turns in the market very quick... most good traders are half sizing their positions to make up for the VOL. Since October most stock Mutual Funds are down by 35% - 60%. These are professionals that are making these trades.... think about what you're doing. Trading is nowhere as easy as you think it is. You're risking money you don't have at ridiculously high interest rates. You need to come back to reality before you destroy your credit and perhaps some of your future. Take 2-3 years to learn how to trade (before you open a brokerage account). I lost 30% on one stock, just today (DRYS).... and I know what I'm doing!!!!!!! This is financially suicidal. Don't do this! If you decide to do this anyway; Learn about the "pattern day trading" rules before you do anything. Watch the video every trading day about one hour after the market close; http://www.alphatrends.net/ Trade only ETF's.