Hi, I was in Barns and Noble today, not been there for a couple of years and thought I'd check out some trading books. I guess the whole trading thing must be over, didn't see anything that looked good. I digress. While I was in the there I picked a big tax book for 2008. If I understand correctly for 2008 I won't have to pay any capital gains ? We are a family of 5, have one income from a reg' job, about 40K, which I believe would put us at worse case in the 15% income tax range. I'm up just over 20K trading the YM and have a few thousand profit from earlier in the year swing trading C and QQQQ. When I looked at the capital gains table it looked to me "those that are in the 10% or 15% range would not have to pay any capital gains" any info' from anybody if I'm understanding it right would be appreciated, I know I need to probably go see an accountant, but it would be nice to have some idea. Thank you.
Haha that's wishful thinking...no capital gains tax... I'm a tax accountant Futures are taxed 60/40 and the wash sale rule doesn't apply. If you are up 20k from YM trading, expect it to be taxed 60% long term and 40% short term (I think that's how it goes). Form 6781 is what you will need. Since you have a full time job, it's probably not likely that you can get full time trader status. But check it out anyways, buy some "office equipment" for your "trading business" and write it off. The cool thing about futures is that you do not need to report every trade. IRS just wants to know if you are a NET GAINER or NET LOSER and then take some money away from ya if you have those gains! Hope that helped!
Study up my friend, especially since you are "a tax accountant" (and some wishes do come true) http://www.extension.umn.edu/extensionnews/2008/zerocapgain.html:eek:
DO NOT trust anybody on this board for tax advice, PERIOD! Hire your own CPA. Read up Jaytrade>>"Tax Increase Prevention and Reconciliation Act of 2005 - TIPRA"
Just download 2007 Form 1040 forms and schedules and put in your numbers. Your 2008 taxes will be similar to and somewhat lower than your 2007 taxes. You will not see a zero tax rate on 20K of capital gains when you have regular income of 40K.
Thank you all for the info' Biog the link you posted is close to what I'd read, I will run it through tax cut (what I have been using over the years, and if for some reason it gets to confusing will seek pro' help) BUT as your link shows I might actually have to pay only a minimal amount of capital gains. ($65100 is zero tax limit so 40K from reg' income plus my trading profits over 20, so looks like I'd just pay 15% on anything over 25K I make) Anyway I will run it and post back at a later date, thank you all again.
you haven't been to a B&N in a couple of years? You got the impression that no capital gains tax is payable on trades? Honestly, for your own good stay far far away from trading. My impulse is to be more blunt but I'll leave it at that.
No, he got the impression that HE would not need to pay tax on his capital gains. He posted the specifics of his situation - did you bother to read the article linked by others before firing off your sarcastic and incorrect response? http://www.nysscpa.org/cpajournal/2006/1206/essentials/p40.htm
Not sure why not visiting B and N for the last two years, should stop me trading Anyway, thank you all for the help, yes I know I need to probably see a CPA down the road, but was just quickly checking to see if I had read right about possibly no or very little capital gains concerning my situation. Thanks.