I have $4000 in a stock account. I traded and profited $800. I put all that back in. Do I have to pay taxes?

Question:

In the begining of the year, I put in $4000 in a personal scottrade.com account. After a few trades, I made out with $800 in profit. But with that profit, I put it all back in (Apple, Ebay and AMD). Do I have to pay taxes on my income tax?

Answer:
Yes you do.

You should get an end of year statement describing what happened in the account. The $800 may be a combination of dividends (paid out periodically by companies), (maybe a very small amount of interest, while it was held as cash), and capital gains (gains in the buying and selling of capital (stocks)).

These three entries go in three different spots on your tax return. Knowing these three stocks, though, the vast majority (maybe all of the gain) is probably capital gains.

There's a form for the 1040, I believe it's Schedule D, where you list your capital gains, by listing each stock purchase and sale. It's pretty easy. TurboTax (or similar) will walk you right through the process.

YES CAPITAL GAINS TAX

I have $4000 in a stock account. I traded and profited $800. I put all that back in. Do I have to pay taxes?

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