What is the effective capital gains rate?

[MISSSNP]

what is the effective capital gains tax rate, 15%?
can i daytrade and be effectively taxed at that rate, 15%?
or?

Paula

 

[stevegee58]

Depends on if it's long or short term cap gains. Day trading is short term which is taxed just like regular income.

 

[speedo]

what is the effective capital gains tax rate, 15%?
can i daytrade and be effectively taxed at that rate, 15%?
or?

Paula

An asset has to be held for at least a year to qualify for capital gains treatment.

 

[beerntrading]

No, day trade income is taxed at ordinary income rates (reported as short term gains / losses on 8949). If you have mark-to-market election with the IRS (form 475f), I think it's taxed as 60% long-term, and 40% short term, but there's some very specific guidelines you must comply with to make that election.

 

[speedo]

Rule 1256 allows for day trades to be taxed 60-40 long/short on futures trades only.

 

[beerntrading]

Rule 1256 allows for day trades to be taxed 60-40 long/short on futures trades only.

I stand corrected...
Is there any reduced rate for trader status or is it all effectively short-term rates?

 

[speedo]

Trader status allows you to Mark to Market and gets taxed as regular income. Take a look at GreenCPA site for good info

 

[beerntrading]

So primary benefit of MtM is no wash sales and no loss limitation?

 

[speedo]

So primary benefit of MtM is no wash sales and no loss limitation?

You get to carry forward loss up to $3000 per year, if you end up with a net loss.

 

[carrer]

Just asking.
Are we taxed from the withdrawal or from the profit from the brokerage account?