Do I have to pay tax on the original cash I deposit into a stock trading account?

Question:

For instance, I deposit $1000 into an Ameritrade account to buy some stocks, but then change my mind and wire it back to my checking account. Do I have to pay tax on that as if it were income, even though I just paid income tax on it in my most recent paycheck?

Answer:
It is assumed that the $1000 you initially used to open the account was taxed prior to coming into your possesion. That being said you moving the same $1000 back and forth is not a taxable transaction. You only pay on the profit you make. Now if you would have invested the $1000 in stock, sold the stock for $1100, then move it back to your bank account you would owe taxes on the $100 profit. Furthermore if you would have bought $1000 worth of stock and then sold it for $900 prior to transferring it back to your banl account you could write off $100. A good clue is that at the end of the year your broker should provide a tax form if needed.

No.

You are just moving an asset that you already have from one account to another account.

This is not income and no tax is due.

If you only have $1,000.00 then TD Ameritrade is too expensive for you.

Use Scottrade instead.

You do have to pay taxes if you buy something with your money.

If you are just moving your money then you are not using your money and you don't pay any taxes.

Do I have to pay tax on the original cash I deposit into a stock trading account?

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