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What can I do to avoid paying taxes on stock market gains ?
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I made money from stock this year, but I really wanna avoid paying taxes on it, if I invest this money on rest estate as investment property, do I escape paying taxes ?
Top Comment: You can lose enough to offset the gain.
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Main Post: [deleted by user]
Top Comment: I’m pretty sure that, now that Kalshi is a regulated platform, it would be treated as gain or loss from a capital asset as per Section 1256. Regulated futures contracts are defined for tax purposes in 1256 and deemed to be given capital treatment. Note that they also have to be marked to market for any contracts held at the end of the year, and the gains or losses are deemed to be 60% long-term and 40% short term. But that’s just my guess for now and I have not seen any IRS guidance yet.
Mark Cuban: “If you tax unrealized gains, you're going to k*ll the stock market”
Main Post: Mark Cuban: “If you tax unrealized gains, you're going to k*ll the stock market”
Top Comment:
Tax the amount of leverage used by billionaires every time they borrow on their assets and value. Problem solved.
What’s the best total U.S. stock market ETF to buy on Fidelity? And aren’t ETFs more tax efficient than mutual funds?
Main Post: What’s the best total U.S. stock market ETF to buy on Fidelity? And aren’t ETFs more tax efficient than mutual funds?
Top Comment: Total US stock market ETFs and index funds from major brokerages have very similar historical returns. Tax efficiency shows minor variation, but does not show a bias towards ETFs. An example is below. FSKAX, VTSAX, and VTI have identical returns. FZROX (zero fund) is a bit higher, which relates to slightly different composition from the others. The mutual fund VTSAX is listed as most tax efficient (lowest tax cost ratio). The ETF ITOT is listed as least tax efficient (highest tax cost ratio). FZROX -- 5-year CAGR = 16.87%, Tax Cost Ratio = 0.42% FSKAX -- 5-year CAGR = 16.72%, Tax Cost Ratio = 0.44% VTSAX -- 5-year CAGR = 16.72%, Tax Cost Ratio = 0.37% VTI -- 5-year CAGR = 16.71%, Tax Cost Ratio = 0.41% ITOT --5-year CAGR = 16.67%, Tax Cost Ratio = 0.53%
How does claiming money lost in stocks work exactly?
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I tried to post this on ExplainLikeImFive but they don’t allow posts related to taxes.
I tried looking it up on my own but I don’t understand what short term losses, long term losses, short term gains, long term gains or capital losses are. I’m not familiar with any of it. My husband mentioned that money lost on stocks could be claimed on our taxes but I still don’t understand how that works?
Top Comment: You have a W2 from work. That's income. You invest in stocks. They go up. Yeah!! So you sell some, the profit is capital gain. Some go down. Boo - sell them. The loss is a capital loss. Some of them you owned for more than a year. Those are long-term. Some, you held less. Those are short-term. Add the long term ones together. That's your net long term gain or loss. Add the short term ones together. That's your short term gain or loss. A. If both of those are gains, you owe tax on all the net gains. Your software will calculate the tax. But net short term gains are taxed as ordinary income, just like your W2. Net long-term gains can get special lower rates. Your software will do that math. B1. If one was gain and the other is loss, you add them together. Net gain? Pay tax. The rate depends on whether the net total, whether short term or long. B2. Net loss? Then you get to use up to $3,000 on your taxes for this year. Just a deduction. Reduce your taxable income. Any excess carries to next year, to be entered into these calculations next year. C. If both are losses, again, you get to use $3,000 of them this year, and the excess, if any, goes to next year. You use the short term losses first, then long-term losses. Again, your software will do this.
How do taxes on SPAXX work?
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Currently have a chunk of change in an Amex HYSA but considering moving that over to Fidelity (where I have my other investments) and parking it in SPAXX. My question is around taxes - for my HYSA, I pay taxes on the growth of the account, currently ~4.25% per year. In my Fidelity brokerage, I pay taxes on dividends and IF I sell off any shares.
How does this work with SPAXX? Do I pay on the growth AND if I transfer money out (not sure if I'm "selling" shares the way I would with my brokerage) or is it JUST on the % growth, not if I transfer money? I think my concern is liquidity and taxes, as I potentially will need to transfer money out of SPAXX for a down payment on a home, so not sure if it's better to leave in HYSA which is pretty liquid vs. having to sell shares and pay taxes on those like I would in a brokerage.
Forgive me if I'm not using the correct terminology, but hopefully the gist of what I'm asking is clear. Essentially just trying to understand what exactly I'm taxed on.
Top Comment: Hello u/dschilling88 ! Thanks for considering Fidelity for your savings needs. I am happy to discuss taxes and liquidity for for money market funds like the Fidelity Government Money Market fund (SPAXX). These money market funds are designed to maintain a 1 dollar net asset value (NAV) or price per share. The earnings on the funds are paid out as dividends, which are taxable. Something to note is that you do not need to sell shares of SPAXX (and many other money markets) to take a distribution. SPAXX automatically liquidates to meet withdrawal requirements without you needing to take action. There are also not taxes when you sell a money market, because there is no appreciation in the price per share. Because the NAV stays at 1 dollar with earnings paid out as dividends, there is no price increase between the purchase and the sale, which means no capital gains tax. I'll share an article on Money Market funds that goes over taxes at a high level, as well as a PDF explainer that goes over how core positions like SPAXX work at Fidelity. I find the visual examples in the PDF particularly helpful. What are Money Market Funds? (Article) What is a Core Position? (PDF) Let us know if you have any other questions, we'll gladly follow up. I hope to see you around here again soon! Enjoy the rest of your weekend!
Mark Cuban: “If you tax unrealized gains, you're going to k*ll the stock market”
Main Post: Mark Cuban: “If you tax unrealized gains, you're going to k*ll the stock market”
Top Comment: I’m more in favor of Ackman’s proposal of taxing loans taken against stock over a certain dollar amount.