Capital Gains Tax Explained📈 How Stocks are Taxed!
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Capital Gains Tax Explained📈 How Stocks are Taxed!


how’s it going everybody I hope you’re
all having a lovely day it is time ladies and gentlemen to talk about
investments and taxes in the same video! as we discuss the rules for capital
gains how your dividends are taxed as well as your stock sells are taxed in
this video I’m gonna be covering specifically more along the lines of
financial instruments like stocks bonds etc I’m not gonna be covering the
taxation on the sale of collectibles or real property such as real estate I’m
specifically focusing on dividends and stocks for this video I’ve gotten a ton
of requests for this video and I’ve been wanting to do it for a long time so I
finally was able to get around to produce it now as we go through this
video you’re gonna see a handout on screen and the handout the word document
you’re seeing is completely free to download you’re gonna find a link to it
in the comment section below and in the description section of this video first
let’s talk about why I think you should be excited about capital gains so when
you think of taxable income and you think about tax efficient income capital
gains is pretty high in the list if you think about it the most favorable income
for income taxes is tax exempt right a good example of that would be muni bonds
where you where you receive tax exempt interest but other than tax exempt
income which are very very few sources of tax exempt income the next best is
income that is taxed at capital gain rate so capital gain income is huge for
your taxes you can save a tremendous amount of money in taxes by structuring
your income to be more capital gain focused oh and speaking of capital gains
if you were fortunate enough to have a capital gain that by the end of 2018
will congratulations let’s start off by talking about what
types of income are subject to capital gains rates this is really important and
there because there’s very few types of income there are the first one is
qualified dividends and the second one is long term capital gains but before we
talk about long-term dividends and long term capital gains let’s take about
let’s take a step back and talk about capital gains in general and why they’re
so awesome okay so depending on your income which
is now it’s it’s mainly based on your overall income as you’re seeing from the
chart on the screen you might pay zero dollars on your capital gains ten
percent 15 percent or even 20 percent 20 percent the max so on capital gain
income okay and this is huge this is a huge tax savings because even if you’re
in the top bracket let’s say let’s say your income is really high and you have
to you you tax on your capital gains at 20 percent well it sounds like a lot but
it’s really not because when you look over at somebody who’s working for wages
that those wages they receive they never wages do not get capital gain rate
treatment they’re always taxed that earned income is always taxed at
ordinary income rates which can be a maximum tax bracket now in the new laws
of 37 percent so compare the maximum 20 percent rate from capital gains to 37
percent maximum tax bracket from wages you can quickly see there’s a huge tax
advantage to making your income through capital gains and if you’ve ever watched
a interview from Warren Buffett sometimes he mentions how the rate of
tax he pays on his income is often lower than his secretaries well that’s what
he’s talking about he’s talking about his secretary who earns wages Payne
ordinary income tax rates versus him who receives a lot of his living through
dividends which is taxed at a much lower rate at least from a percentage
perspective and obviously as you guys can see if your income is low enough you
can pay zero tax on your capital gains and qualified dividends but with that
simple example of a tax rate savings of 17 percent over the maximum bracket you
can quickly see how fast the tax savings can add up now let’s talk about capital
gain rate treatment and qualified dividends and then we’re gonna talk
about the treatment for stock sales and stuff like
so four qualified dividends what you need to know is a lot of it’s just about
the holding period okay so it’s how long you hold the investment so the longer
you hold the investment the better now that you know that there’s a huge tax
advantage to being taxed at capital gains rates let’s talk about how that
applies to qualified dividends and with dividends qualified dividends in
particular there’s there’s two types of dividends there’s ordinary dividend and
there’s qualified dividend well the qualified dividend is the one
you want that’s where you get the capital gain rate taxes versus that
ordinary dividend you get that’s when you’re gonna be taxed at the same rate
as wages are as if you’re working for for a paycheck at a job as a simple
example if you buy AT&T stock when you first get your first dividend payment
you might not have held that stock long enough to get a qualified dividend
treatment so that dividend payment is gonna come to you in the form of an
ordinary dividend and you’re gonna be taxed at ordinary rates but if you do
hold on to that investment long enough then you’re gonna get the more favorable
capital gain rate treatment which is what this talks about right here it says
common stock investors must hold the shares for more than 60 days during the
121 day period that starts 60 days before the ex-dividend date for
preferred stock holders the holding period is more than 90 days during a 181
day period that starts 90 days before the ex-dividend dates over time the
longer you hold the investment the more likely you’ll start to receive instead
of ordinary dividends your dividend will eventually become qualified so there is
an incentive to hold on long term to that investment especially if you’re
somebody who’s investing for dividends now there are certain types of stocks
there were companies that you can invest in the where you can’t get the qualified
dividend treatment no matter how long you hold it and the perfect example of
that is real estate investment trust no matter how long you hold on to a real
estate investment trust it is they’re not allowed to send out qualified
dividend treatment or qualified dividends it’s always gonna come to you
that dividend is always going to come to you in the form of an ordinary dividend
so those are the basic taxation rules for dividends and now let’s move on to
capital gains or when it comes to the sell stocks so when we think of stocks
we need to think of the holding periods right so because there’s a short term
and there’s a long term holding here in the long-term holding period we need
to hold that investment before we sell it we need to hold it for more than a
year notice I did not say exactly one year if you hold the investment for
exactly one year and then you sell it you’re gonna be subject to short-term
capital gain rates which is you don’t want that you don’t because short-term
capital gain rates are taxed at ordinary income rates just like ordinary
dividends and just like wages you don’t want that that’s a higher taxation rate
so you want to avoid that so if you’re thinking of selling this as a security
of ETF a mutual fund whatever our stock and you’re close to having it held for
more than a year then by all means I would probably encourage you to hold on
to it for a little bit longer hold that stock for one year in one day and then
sell it and then you’re gonna get that good nice capital gain rate treatment so
it might be the difference between when you sell that stock it might be the
difference between paying 30% in tax versus 15% tax just by waiting a little
bit longer so huge tax savings there as you guys can see question I get a lot is
Mike when do I have to pay taxes on my stocks sales when do I have to pay taxes
on my dividends the answer is it really depends just to eliminate any confusion
as we progress to talk about taxes in regards to your dividends and taxes in
regards to your capital gains when I’m talking about taxes in this video just
know that I’m talking about if you have your investments and a normal standard
brokerage account in other words it would mean if your investments were not
within a retirement account such as a traditional IRA or a Roth IRA if your
investments are held within one of those types of accounts one of those
retirement accounts then when you receive dividends capital gains you
would not be taxed at all you would not be paying tax at all until you take a
distribution from those accounts and of course we know from some of my other
videos that if your investments are within a Roth IRA even when you take a
distribution it’s not going to be taxable but for the purposes of this
video we’re strictly talking about taxation of your dividends and capital
gains and the things like that within a normal taxable brokerage account a non
retirement account now for most people their income from you know the sale of
securities and things like that is it’s not
a lot and so generally in reality when they go to pay the tax on that they’re
paying it when they go to file their tax return in the following year that’s for
most people but it’s a lot different if you have a really high income you’re an
investor who gets a lot in dividends or you’re doing a lot of sells of stocks
you have short-term capital gains long-term capital gains etc then you
might look at making the quarterly estimate throughout the year the stay
caught up with your taxes but that’s usually for higher income
individuals but just so you know even most investment platforms you can tell
them to withhold on your dividend payments or from cells of your
securities you can say okay well if I receive you know dividend payment of X
please withhold 20% on that for taxes so that way what’s nice about that if you
want to do it that way you don’t have to but at least you’re
paying your taxes in throughout the year so that you’re not surprised when it
comes to tax time and when you go to file your taxes and realize oh shoot I
received $10,000 in stock sales and dividends no shoot now I have to pay
hundreds and hundreds of dollars in taxes on this income so that is one nice
thing you can do if you want to do it that way
but like I said you don’t have to all right let’s talk about sock sales now
and taxes for that so there’s two concepts you need to know the first one
is there’s recognized gains or losses and the second one is there’s
unrecognized gain or loss so the unrecognized gain or loss is really
simple it just means your your position within investments whether it’s whether
you have a gain or loss there’s no tax effect over here so an unrecognized gain
or loss has no tax effect and you guys can read this right here in in the
handout the important one for taxes as the recognized gain or loss that’s the
one you want to know about what a lot of people don’t understand or what they
need if they’re especially if you’re new to investing is you don’t actually
recognize gain or loss until the day you sell the investment until you sell the
investment no matter if you have a gain of a million dollars it doesn’t matter
it’s only once you sell it that’s when you have to pay taxes on that money so
just keep that in mind when you sell it that’s when you recognize it and this is
I put a simple example in the handout but if I have a gain of seven thousand
dollars of my Amazon stock if I hold on to Amazon it has no tax effect I don’t
have to do anything with it until the day I sell it another question I get a
lot is Mike how our capital gains calculated it’s not too bad it’s not
it’s not too hard to figure that out so it’s basically you take your fair market
value of the stock you sold or a mutual fund or ETF whatever it was as you sold
– you’re caught – your cost basis so you’re fair market value minus your cost
basis so if you have let’s say you sold a stock let’s say it’s Amazon let’s say
you sold Amazon for $2000 and originally you purchased that stock back in you
know about over a year ago and for let’s say $800 well your cost basis now is
$800 so purchase price and cost basis are the same thing but for tax purposes
if you want to learn to speak tax you want to use the term cost basis that’s
what you’re gonna hear a lot so your cost your to calculate your capital
gains now is let’s say we sold our stock for $2,000 our cost basis was $800 that
means we have a capital gain of $1,200 as I mentioned in the example we held
this Amazon stock for more than one year what does that mean do we get the
short-term treatment or long-term treatment if you think long term
treatment you are correct because we held that investment for more than one
year before selling it okay so we talked a lot about capital gains on stock sales
but what about if you lose money you know people lose money in the stock
market what do we do then well it’s not all bad news if you recognize a loss
there’s two things that will happen one is your capital loss from that
investment will helps offset other capital gains and to part of that loss
can be used to offset other income or it will be carried forward which we’re
gonna discuss here in just a minute and I and I have an example of how a loss
would be applied against other capital gains right here but I’ll let you guys
read that for yourself and the next question you might have are my losses
limited from my capital gains and the answer is yes they are limited and so
here’s an example so in this example chipper incurs a short-term capital loss
of 5,000 for the year how much of the loss can he take now this is from
capital gains right or sells the securities and things like that yeah it
really depends on your filing status if chipper is single or married fine
separate he can deduct up to $1,500 in the current tax year from that loss on
the sell of his stock what happens to the rest of it well the rest of it the
other $3,500 of that $5,000 loss would carry forward to a few
year now if chippers filing status was not single but if it was married filing
joint he could deduct in that first year up to a three thousand dollar loss on
that five thousand and the rest remaining would carry forward to the
next year our future years as you guys can see here the amount of loss not
deducted will carry forward until it’s eventually used up it says the lost
carry forward will retain its characteristics as either short-term or
long-term so if you have a long-term loss it’ll carry forward as long-term
loss a short-term loss will carry forward as a short-term loss moving on
let’s talk about the ordering rules just real briefly so when you sell securities
especially at a loss then the ordering rules come into play of how that loss is
used up first the loss is going to reduce any other short-term capital
gains and you know because this is because we’re just looking at the
short-term capital loss for example guys the secondly it but if there’s no
short-term capital gains then what but there’s no short-term capital gains that
loss is then apply to gets net long-term capital gains tax at the 28 percent rate
which would be at the rate Tec collectibles are taxed at if there is no
collectibles then we moved on down the line to number three we could reduce any
net long-term gain tax at 25 percent if there’s any number four then we would if
last but not least if it hasn’t been used at that point we would reduce any
net capital gain tax at twenty percent 15 percent or zero percent if there’s
any and of course if there’s nothing to offset it that loss would just carry
forward to a future year there are ordering rules for long-term capital
losses but I’ll let you guys read that for yourself big question people have is
what happens to my capital gains if they die if somebody dies like a spouse well
unfortunately upon once passing all capital gain lost carriers are lost but
if you’re married there there is an exception of that so let’s go down a
little bit here upon one spouse is passing away half of their losses
allocating to the surviving spouse and can be carried over to future years so
you you at least get to take half the loss from a DC spouse if there is one to
begin with whereas if you die single and you lose it you totally lose it it just
disappears but by then you’re dead anyways so who cares
okay wash tell rules what is that well a lost sell occurs
when a taxpayer sells a stock at a loss within 30 days before or after the sell
and invest in substantially identical stock or securities acquire substantial
identical stock or security than in a fully taxable trade or enters into a
contract or option to acquire substantially identical stock or
securities if when you read that it sounds really confusing but that a more
basic example is let’s say I go out in a I buy Chevron and let’s say on January
1st I sell Chevron and I sell it at a loss within like 20 days later I think
Chevron is a good investment again and I go by Chevron once again
well because I’m buying the same identical stock once again within 30
days or similar sock I cannot deduct that loss so I can I cannot take that
loss on my tax return when it comes tax filing season and you’re gonna see that
on your 1099 B which we’re gonna talk about here in just a second when you get
your official tax form for that tax year you’re gonna see that wash sale law
showing up it’s gonna have a code W next to it to identify that it is in fact a
wash sale all right what happens to my stock or securities if they become
worthless it does happen worthless securities are treated as
though they were sold on the last day of the year the last day of the year will
determine if your loss will be long-term or short-term on these securities where
do I report capital gains our stock sales on my taxes though well let me
tell you guys the forms you need to know about there’s a couple forms you need to
really understand one of the first forms to know about is form 8949 cells and
other dispositions of capital assets in my opinion this is one of the trickiest
forms to know about I’m gonna have to make a whole separate video about it
because it’s not that complicated but it would take too much time to explain here
the NICS form to be aware of is schedule D Schedule D shows capital gains and
losses and this is where you would go to the report you’re not only your
short-term capital gains and losses but your long-term capital gains and losses
as well this is another form where I could do a whole separate video about
Schedule D and form 8949 interact together they work with one another if
you study those two forms closely you can see how they’re related
and how information can transfer from one form to the next from Schedule D now
for your final net capital gain numbers once you add up all your short-term
short-term gains or losses all of your long-term gains and losses then that
information now transfers to under the new tax forms – 1040 Schedule one other
under other income which is what I’m showing you right here you can see I’ve
highlighted the line where total net capital gains are reported capital gains
used to be reported on 1040 page one but because of the new tax form for 2018 now
the only place you can find them is 1040 Schedule one since we’re talking about
capital gains and investments let’s not leave out Schedule B on Schedule B
you’ll see here on the top half of the form is where you would report interest
income on the bottom half of the form is where ordinary dividends would be
reported now notice it does not say qualified dividends just ordinary
dividends so what you would do is you would put all your interest income here
all your ordinary dividend income here and then that those totals would
transfer to 1040 page two as you guys can see here on screen so we just
covered the majority of the forms that relate to capital gains we talked about
Schedule D we talked about form 8949 we talked about 1040 Schedule one we talked
about 1040 page two and of course for dividends interest in dividends is on
Schedule B so we’re talking about taxes well where the heck do you get this
information free taxes do you have to cut it down yourself do you have to keep
track of every penny you buy and sell well the good news is that your
brokerage company are the custodian of your account let’s say you’re with Robin
Hood Ameritrade or each rate or whatever Vanguard fidelity when it comes to tax
time usually it’s around February they’re gonna send you a an official
statement it’s called a 1099 B or it’s a 1099 – B and that statement is gonna
have all of your investment activity that is important to know for tax
reasons it’s it’s it’s meant for taxes it’s not meant to tell you how much how
many shares of this investment you own or that investment it’s meant to report
how much interest income you received how much dividend income you
sieved whether the dividends were ordinary dividends or qualified
dividends foreign income capital gains short-term and long-term it’s gonna
report all those transactions on that 1099 B and it usually comes out February
of every year so be looking for it as we wrap up the video there’s a few final
items I want to cover with you guys just real quickly and there is let’s talk
about net investment income taxes that’s a big one now for most people they’re
not gonna have to pay this net investment income tax comes into play
when a person has a really high income and they have capital gains as well now
this doesn’t even come into effect until your income starts to exceeds over 200
grand if you’re single if you file your tax return single or 250 thousand if you
file married filing joint so that’s so for most people you’re gonna completely
avoid this but if if you remember earlier in the video we talked about a
20% max capital gain rate well if you’re subject to net investment income taxes
this tax on another three point eight percent so your max capital gain rate
goes from 20 percent up to about twenty four percent now because of these net
investment income taxes unfortunately but like I said it doesn’t happen until
you get a much higher income when I do produce these tax videos I mainly
produce videos around the federal taxation laws because each state is
different so you really need to look carefully at what the capital gain rates
rules if any apply to you the state you live in California for example does not
have capital gains rates that everything is taxed at ordinary income rates which
really sucks but that’s just the way it works so I don’t get any favorable tax
treatment here in California but no surprise there that’s why the bare on
the flag right so I wanted to mention that just so that you know to look out
for that on your state income tax return last but not least I have included a
link to publication 17 at the bottom of the word document you can go here even I
know it says 2017 returns ignore that many of the rules are exactly the same
for 2018 and on when it comes to capital gains and Taxation so you can find more
information within this portion of this document and you can find this
information on the IRS website are this link right here so be sure to check it
out if you want to learn more and I’ll probably also link up the link for the
instructions to form 8949 Schedule D and 1040 page one where you
can find a more informational on all of this the final thing on a holding
periods I want to mention here well as we’re talking about long term and short
term is that when it comes to investing the taxes you are much better off going
long-term than you are short term if you’re somebody who’s a swing trader day
trader or if you know people like that well when you sell when you when you
hold a stock for one year or less you’re subject to ordinary income rates so
these people who are doing swing trading and all that kind of investing who are
holding it for a very short period of time they’re paying the maximum tax
rates on that income which is a major bummer versus if you just hold your
investment for the long term and then you sell it once you’ve held it for more
than a year then you’re gonna only gonna be subject capital gain rates which like
I said range from only zero to twenty percent in most cases much better than
the ordinary income rates which can go as high as thirty seven percent you guys
probably know now I’ve probably realized now from watching my videos but I really
like investing for dividends and I’m over all I’m a generally a long-term
investor so I my focus is to build a portfolio of dividend producing assets
ETF stocks and things like that that will spin off an income for me a
retirement of as much in qualified dividend income as possible so that when
they receive that income I pay the least amount of tax possible the least amount
ladies and gentleman that was truly a whirlwind of information we talked we
covered everything from what types of income to our subject to capital
guarantee treatment short term holding periods long term holding periods we
talked about the ordering rules we talked about just a boatload of stuff in
this video where to report on your taxes etc so hopefully you guys found this
helpful I look forward to let me know what you guys think about all this stuff
about these rules make sure to download the handout because I spend a lot of
time putting this together for you guys and it’s gonna be a great reference when
you’re thinking about your investments and your taxes and things like that you
can go back and reference this too you know stay fresh on all this stuff if you
guys liked the video please do me a solid by smashing that like button it
really helps me out and helps get this video out promoted to more and more
people if you’re new to money live TV well welcome to the channel on this
channel our focus is to help you become fiscally fit and
we do that by teaching finances investing and taxes and more on a
regular basis to join our community all you have to do is hit that red subscribe
button and please hit that notification bill icon so you do not miss any of our
future uploads well everybody I think I’m gonna wrap up the video here I
really appreciate you taking time out of your day to be here I know it’s a big
commitment and this was a lot of information to cover so remember to use
a time stamps if you want I look forward to reading your comments in the comment
section I hope you guys have a wonderful week take care of yourself stay chill
and now take this information and use it to live your life on Kage I’ll see you
all in the next one guys pace you

About Gregory Ralls

Read All Posts By Gregory Ralls

46 thoughts on “Capital Gains Tax Explained📈 How Stocks are Taxed!

  1. i just watched that documentary "Fyre Fraud"
    you should do an analysis of how those guys managed to lie to their investors and still get tons of money from them.

  2. Links and downloads including free handout:

    Handout can be found here: https://www.dropbox.com/s/hlulphh605k7mwc/capital%20gain%20tax%20rules%20for%20audiance.docx?dl=0

    Our complete investing library can be found here:

    Stock Market Investing: https://goo.gl/hi2kK4

    Dividend Investing Playlist: https://goo.gl/njSrk2

    Free handout and links to tax forms:

    https://www.dropbox.com/s/hlulphh605k7mwc/capital%20gain%20tax%20rules%20for%20audiance.docx?dl=0

    Schedule D instructions: https://www.irs.gov/pub/irs-pdf/i1040sd.pdf

    Form 8949 Instructions: https://www.irs.gov/pub/irs-pdf/i8949.pdf

    Form Schedule B Instructions: https://www.irs.gov/pub/irs-pdf/i8949.pdf

    IRS publication 17: https://www.irs.gov/pub/irs-prior/p17–2017.pdf

  3. Video time stamps so you can skip ahead like a boss!

    • How Capital Gain Tax Rates Save You Big On Taxes – 1:00

    • What types of income are subject to capital gain rates? – 1:53

    • Capital gain rate treatment for qualified dividends – 4:00

    • Capital gain long term/Short-term holding period rules – 6:08

    • When do I have to pay taxes on my stocks or dividends? – 7:24

    • Recognized gain/losses vs unrecognized gains/losses – 9:50

    • How are capital gains calculated? 11:00

    • What about stock losses and taxes? 12:16

    • Capital gain ordering rules 14:00

    • Stock wash sale loss rules: 15:40

    • Worthless stock and securities: 16:53

    • Where do I report capital gains for taxes?(Form SCH D) (Form 8949) (Form Schedule B) 17:06

    • What tax statement is used for Capital gains and dividends? 19:25

    • What is net investment income taxes? 20:28

    • Capital gains and state income taxes 21:23

    • Tax advantages of being a long-term investor 22:31

  4. Thanks for all of your support I can't believe the channel is nearing 13,000 subscribers. The growth unbelievable. It would mean the world to me if you enjoy the video please help me CRUSH that like button to help this video/information reach more people over YouTube, or consider sharing this video with a friend. Thanks for being patient for this one and for all the requests. I've wanted to produce a video around this topic for a long time. If you guys like this one i'll plan to have more investing/tax videos to come in the future. Please remember everything in this video is produced for educational purposes only and should not be taken as legal or tax advice. Have a great week everyone and live life uncaged!

  5. Thanks so much for all the info! You know I've been looking forward to this one. Would love to see videos on the tax forms you mentioned in the future! 🙂

  6. Tax season is among us! Haha good luck with all the work coming up for you Mike! Just got my tax returns for mutual funds and got some cap gains, kinda downside to them I guess even when you don’t sell them

  7. As usual, good content.

    I actually liked the draft forms where they retained the line numbers from the old 1040 in the new schedule 1-5.
    Line 37 had a special meaning… Oh well. One minor correction. At 13:30 in the video, you state single and married filing separately being able to deduct up to $1500/year against ordinary income. Actually, for single filer, you can deduct $3000/year–it is only for married filing separately that limits the loss against ordinary income to $1500/year.

    I have to take a closer look at the option to do tax withholding from stocks. I suppose it works the same
    way as W-4 withholding where it is assumed 1/4 of the total for the year is paid every quarter even if all
    of the withholding came out in December.

  8. Thanks, Mike! This was one of the more difficult videos you must have made given all the "clarifications" you had to make. 🙂
    With that said, may I add to your example @ 7:30–8:23 to your "clarification" as to not pertaining to stocks held in a Traditional IRA. All monies, whether dividends (all types), capital gains (short and long term), stock distributions, etc, are all taxed the same, all are taxed as income when withdrawn from the account. This alleviates all the record keeping by you / your broker which is needed in a standard brokerage account. This is why so many trade within the shelter of an IRA. A caveat to this, one cannot take any tax-loses within these accounts when monies are withdrawn.

    Thanks, Mike. I hope week1 in tax season went well. Peace bro!

  9. Mike, I’ve been following you for more than a year now. Each video I’m learning new things from your FREE advises and suggestions. Thank you…

  10. I know you said this is just about securities, but a funny one is bitcoin. Apparently, 1091 wash sales don't apply because it's considered property by the IRS hahah. It's maybe a little iffy, but I haven't seen an IRS notice clarifying otherwise.

  11. Side note: 20% long term capital gains bracket is a myth. By the time you are there, you are subject to 3.8% Net Investment income tax thus it goes from 18.8% to 23.8%.

  12. I just wanna say, I have been searching and reading a lot about investing and your videos have helped me SO MUCH. They are simply and easy to follow, very well explained and they have been a huge boost on my confidence. You make investments to look like something I can do it, and not a scary process out of my reach and I am really thankfull for that!!!!

    Keep up with the good work.

  13. Thanks Mike, you did a great job! I'm wondering if I can find form 8949 on Turbo Tax. I'll check it out this year. Thanks for the explanation. Lynn

  14. Hi Mike. I am new to your channel and recently new to investing on my own. Can I ask 2 questions?
    1. I am in a Chase managed taxable brokerage account and on occasion have withdrawn money and transferred it to my Chase checking account. Is it to my tax advantage to have the Chase broker liquidate the stocks or whatever that have a capital gain? I always thought it would be better to liquidate non capital gains but watching this video that may not be the case?
    2. I also have a M1 IRA and in part hold $1500 in SHY ishares 1-3 year bonds and was thinking to get more aggressive with it. If I sell it M1 will transfer the balance to my remaining investments. Would this be a bad tax maneuver? Sorry I am just trying to learn the big picture first and with small steps. Thanks!

  15. Mike would it be possible for you to make a video on how to buy a stock? What are the steps. Can a person buy a certain stock on its own or would he/she need an investment company to buy it?

  16. I did my 2018 taxes and was flabbergasted that the first $78,750 of long term capital gains are not taxed (married filing jointly). A big portion of my dividends were qualified too. I guess it's like someone said, "Only poor working saps pay taxes."

  17. Hi, I love your channel please continue. I have a question, I am a low income than manage to put some money in stocks to thinking ion my retirement. my income annual is 33.000 dollars. I will not touch my dividends I want to invest these dividends, my dividends are 600 a year I have to pay taxes for this? Do you have a book recommendation that I can read and learn in addition to your channel? Thanks

  18. To make the long-term and short-term selling irrelevant, couldn't you just use your your IRA for day trading and swing trading as a hack to bypass paying any tax on the daily profit/weekly/monthly gains?

  19. great vid! just to clarify… if i sell a stock for a profit through robinhood for example, and i keep that money in the robinhood account its not eligible to be taxed correct? i only have to pay capital gains tax if i transfer that money to a bank account? thanks again for the vids.

  20. Mike – Fantastic stuff! Very educational!

    Got a Question:

    Hypothetically speaking of course 😀

    Chipper explains the following scenario to his CPA to prepare for next years tax filing…

    – He's single, less than 59 1/2 and unemployed with no current income

    , but has found an amazingly hot ms chipper in maui to hang with….

    – In 2019 he decides to sell 25K in long term stock options and

    – Takes another 25K in early 401K lump sum dist. from a past employer that he no longer works for

    The CPA responds:

    Okay, Cap gains tax rate against 25K in stocks would equal 0% (Chipper exclaims, "Yippee!") , because it falls between the tax bracket income of 9,525 < 38,600.

    But after adding that 25K from stocks + 25K for the 401K early dist. together equals 50K in total income, now that puts Chipper in the 22% tax bracket between 38,701 < 82,500. So now 22% x 50K = 11,000 Chipper owes in taxes?

    Or is there much more to calculating this example?

  21. A retired Nevada resident with no income (no SS, no benefits) sells 95 AMZN bought at $1,500 on 4/17/18 and sold for $1,900 on 5/2/19 makes a capital gain $38,000 would be paying no taxes. Correct?

  22. Excellent video! I enjoyed it immensely! I have a somewhat related question. If a person who has a financial based channel (such as yourself) Could you write off a big stock purchase as a itemized deduction or business expense if you used it as a way to make content for youtube if you tracked the progress (or losses) that stock(s) had?

  23. how about if it is a mutual fund with in my IRA? can i sell it and buy different mutual fund with almost same value? and will i still be able to declare it as lost? i bought it almost a year now, but i haven't had a gain since i bought it, and i never put additional money into it.

  24. In the case of a day trader, say they start with 10k, and over the course of a month they make and lose money down to like 2k, then make it back up to 10k, essentially starting the next month at the same amount … is this clear? What if they did that 3 times, is the rate of money that can be taxed still 0? Or will they be taxed for 30k profit, though they are still in reality are at 10k?

  25. Hi, I am a new immigrant who just get green card on June 30, the date I become U.S. tax resident. I sold some stocks held for more than one year in July 2019. My question is how do I count my cost basis. Should I count the cost based on the date I bought stock when I was still outside of U.S. not a tax resident? Or should I count my cost based on the stock price of the date I became tax resident?

  26. let's say you're retired and only income you have is 3k from social security and 2k from dividends, so you decide to sell 500k in stocks with a zero cost basis because you think it's all going to be tax free, I don't think that's the case, can you confirm?

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