Capital Gains Tax

Edwards Finance > Capital Gains

Q. I am new to online trading and have some questions: 1 When is it payable 2 How do I pay it 3 Is it payable only on profit made by selling shares and transfering funds out of my trading account 4 Is it payable if I sell shares and make a profit but immediately use the funds to buy more stock. 5 If answer to 4 is yes, how on earth is it worked out if I make alot of trades, lets say 2-3 trades (or more) per week 6 I have lost on two of my stocks (last year). One is now worthless, the other was cashed in at a fraction of what I paid, can this be taken into account in calculating CGT, if so how? Thanks in anticipation

A. > I am new to online trading and have some questions on CGT > 1 When is it payable > 2 How do I pay it Most just work it into their yearly taxes. However if you have large gains filing quarterly is a better idea so that you won't get hit with interest or underpayment penalties. > 3 Is it payable only on profit made by selling shares and transfering funds > out of my trading account Only on gains/profit. > 4 Is it payable if I sell shares and make a profit but immediately use the > funds to buy more stock. No. > 5 If answer to 4 is yes, how on earth is it worked out if I make alot of > trades, lets say 2-3 trades (or more) per week See my answer to #1 & #2. > 6 I have lost on two of my stocks (last year). One is now worthless, the > other was cashed in at a fraction of what I paid, can this be taken into > account in calculating CGT, if so how? Yes. Losses are deducted from gains. If you still have a profit, then you're only taxed on that profit. There are other rules that come into play, such as the 30 day wash sale rule, making each person's tax filing unique. Also, if you end up losing more than you make for the year (a capital loss) you can use that loss to offset your income up to $3,000 and anything over that in following years.

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