taxes and finding successful traders

Quote from vk60546:

two questions:

1. How do taxes in the US work? Lets say (very hypothetically speaking) that I've started out with 10K and earned 40K this year, making my net profit 30K for this year. If I decide to keep the money (all stocks) in my account, will I be required to report this as income or does it count as income only when I transfer the money from my brokerage account to my bank account?

1 a - if this is a profit from stocks, is this treated as a short term capital gains and is it then taxed the same as additional income from my job?

2. Lets say I wanted to find a successful trader to trade my 10K for say, 20% annual return.

2a - is this an unreasonable request? I'd think that a big risk should demand a bigger return.
2b - how to find a trader willing to trade my ca$h and how to make sure they are not a scammer? Probably need to ask their annual income statements, eh? But how can they give that info to me and keep their privacy?
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A. The 30K of "unrealized gains" will not be subject to tax until you close your trade. When you close the trade, the gains will be taxed at the short term rate of up to 33% (depending on your total income). The 30K will also be added to income and you will pay taxes on ordinary income. This should answer question 1.
 
I'm in Canada so the tax part may be different. Here you pay capital gains on profits taken (closed trades) during the year. Then there can be any number of expenses that you may be able to deduct such as interest used to earn etc.

There could be some traders interested. I had a number of people I knew ask me to trade small amounts like that I passed as they would be hard to make decent returns on with my style of trading. I have recently been considering setting up a trading account specifically for that where it would be more investment type trades such as call written on div paying stocks and such. If you could find a trader that had a similar idea where he takes 10K for example from 100 people and trades it, I could see where it could be profitable for all involved.

It does then require a bit of legal advise and some good contracts to turn over 10k to a stranger to risk in the market for you. :)

The other choice would be to get som investment strategies and trade it yourself. Not true trading as such, but more investing on steroids... I have some registered accounts that I can't day trade that I have been getting some really good returns on. It's only been 18 months on those so I can't say what they'll be like long term. If you're interested in trying that yourself, let me know and I can give you some ideas to get started with.

Mel

Quote from vk60546:

two questions:

1. How do taxes in the US work? Lets say (very hypothetically speaking) that I've started out with 10K and earned 40K this year, making my net profit 30K for this year. If I decide to keep the money (all stocks) in my account, will I be required to report this as income or does it count as income only when I transfer the money from my brokerage account to my bank account?

1 a - if this is a profit from stocks, is this treated as a short term capital gains and is it then taxed the same as additional income from my job?

2. Lets say I wanted to find a successful trader to trade my 10K for say, 20% annual return.

2a - is this an unreasonable request? I'd think that a big risk should demand a bigger return.
2b - how to find a trader willing to trade my ca$h and how to make sure they are not a scammer? Probably need to ask their annual income statements, eh? But how can they give that info to me and keep their privacy?
More...
 
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