I am new to trading stock.When do you have to pay tax on profits you recieve after sale of stock? Plea?

Question:

I may be purchasing some stock and selling after a few days. The money will go into brokerage account that I have set up correct? When do we pay tax on the profit? Anything else I need to be alert for? I am going to be using scotttrade which has a low transaction cost for all transactions of $7.50. Thanks in advance.

Answer:
You will have to declare any gain or loss (along with dates you bought and sold) on your 2007 tax return. Keep REALLY good records, otherwise you can get stung quite badly when you get audited.

Don't be surprised if the stock you buy does not go up as much as you expect, because it would be illegal for you to have any information about it that isn't also available to everyone else. If you DO, that's called "insider trading", and they will put you in jail! (A nice jail though...)

It is very, very, very rare for ANYONE to deliberately make any money by buying stock and selling it within a few days, though it happens by chance all the time.

Good luck!

I am new to trading stock.When do you have to pay tax on profits you recieve after sale of stock? Plea?

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