Capital gains tax regarding.

Tax question on stock capital gains [need an expert on taxes]?

• Hello all. I have a question regarding taxes on capital gains for short and long term gains. I bought a few stocks during sporadic periods and did some reading on the benefits of holding long-term (for a lower tax bracket). My questions: 1. Say I were to buy the stock for the first time on January 5th and held 100 shares of XYZ. On January 25th, I bought more shares of XYZ to increase the amount of shares I own in that one company. Which date is considered an exact one-year capital gain? The date in which I first bought the stock or the date in which I ceased buying shares in that company? 2. When will they collect my tax money on the income I have received once I have sold my stock and received the cash? Do they tax you at the end of the year or as soon as you sell your stock? Because I want to be able to put that money to the side so that I can pay the taxes. 3. I understand income tax includes your job income and any other income you've received and you have to claim this at the end of the year. Can I claim it and receive some of it back at the end of the year? This including my stock gains and job taxes? What is the percentage of it that I will get back? Say the government took $65,000 of taxes from stocks and $12,000 from job, that equals $77,000. How much will be given back? If you could provide me with detailed information on this, it would be greatly appreciated and I promise to rate your answer as the best. Thanks for the help...!

• Answer:

  1. Each stock's purchase date stands on its own. If you sell a share 1 year or less from the date of purchase then it's a short term gain. More than one year after purchase and it's long term. 2. You generate the tax liability at the time that you sell. If you owe $1,000 or more at filing time there are penalties for underpayment of estimated taxes. Therefore you may need to make estimated payments using Form 1040-ES. 3. When you file your return you receive a refund if you paid in more in taxes via withholdings and/or estimated payments than your tax liability. If you paid in less than your tax liability then you owe. If you paid in $77k against a $77k tax liability you get $0 back.