Short Term vs Long Term Capital Gains Tax - 2020

The number one thing people don't know when they start investing and yet is one of the most important factors! In this episode, we break down short term capital gains tax and long term capital gains tax per US law in the year 2020.

The Socials:

Daniel Snyder (Dean Gatsby) -

[darkhumphrey]

This is mindblowing about capital gains tax to me. Okay income tax, I will get over it, but why does the government get piece of pie for a RISK that I made to invest for return? They are sharing zero risk but getting a fat return. So are they gonna give some money back if I lose money through investment? Of course not, so what makes them entitled to the gains? Pure theft it is

[spencehightower]

This is something that can be easily overlooked yet impact your yields. Thanks for sharing!

[terrancepinkney]

Thanks for the super simple and clear explanation. I'm looking to make some gains heading into next year but definitely trying to keep the taxes as low a possible.

[abn]

Is capital gains tax due to government at end of the year or needs to be paid within months ?

[darioussmith]

so what if I sold $5 million of stock or crypto that I held for 2 years but I am a gig worker that makes under 35k how much of long-term capital gains tax do I owe on that $5 million ?

[michaelgreenan]

In short-term gains taxes, is the whole principal taxed or just the gains?

[SixthAllicard]

Do I still get taxed for short term trades even if I don't pull the money out of my Robinhood account until a year later?

Ex: if I buy AT&t and sell it the next day to make $100 in profit but I keep the money in my Robinhood account for more buying power Do I still get taxed?

[toreyram]

If I made $10, 000 in short-term gains and I fall within the 12% tax bracket, does that mean I give the government $1, 200 and keep $8, 800. Or do I keep $1200?

[arashrezaee]

ok but say I invest $100 in a stock @ $50 then hold onto it for over a year then decide I want to invest more into it when it's low like $25 but then it goes up to $40 and I decide to take a portion of it out as part of my profit from the $25 I invested in it but still hold onto it, would that be considered as a short term gains or long term gains since I've had the stock for over a year but decided to put more money into it but a bit of it out?

[mydaughter]

Tax rate base on total profits from selling not including the cost right ?

[cj]

Im pretty sure short term gains are taxed as ordinary income (whatever tax bracket your AGI falls into) and long term gains are taxed at 15%. I watched the video twice but I didnt hear any confirmation of this.

[bobsmith]

So if my short term loss is bigger than my long term gain, do I have to pay taxes on it?

[sportsbettingyoda]

bro so what do I have to pay Cap gains on long term gains this year of 26, 800. Im single and 22 years old. Gains are from stocks. Thanks!

[Dom]

When does the timeframe begin? Like if I just buy 5 dollars of the stock on Jan 1, 2021 but then buy another 5 dollars later in June, 1, 2021. If withdraw gains on Jan, 1, 2022 will it be considered long term or not until June 2022 because of my last purchase?

[adrianmontano]

If you start with a 10, 000$ account, and you make 5, 000$, then lose 7, 000$, and proceed to make back 2, 000$, do you pay taxes on all 5, 000$ + 2, 000$ of your gains? within a year? or just the equity after your original 10, 000$

[mydaughter]

Could u give me advise about trading ? I’m new. I buy and sell when it gains. What will be a problem if I buy and sell same day or week ?

[Vita-a-stelle-e-strisce]

It’s not clear to me. If for example I make 50k a year with my regular job and I make 50k in short term capital gain with stocks, these 50k are added to the 50k of my salary so I will pay taxes like I made 100k meaning I just have to check the tax brackets? Or the 50k made with stocks are taxed separately with a different percentage and don’t add up to the 50k of my salary?

[bulletbarrage]

So short term CGT is directly stacked on top of income? So can it be offset by the standard deduction?

[BooLee]

I've got a question for which I have searched and searched and just can't find an answer. Currently, for Married filing jointly, and with an income up to $78, 750, Long Term Capital Gains tax is 0%. But does that $78, 750 include the actual capital gains themselves?

What I mean is, let's say my wife and I have an annual income of $75, 000. If I sell stocks, will only the first $3, 750 of capital gains be taxed at 0%, or will $78, 750 of capital gains be taxed at 0%?

[twscho]

After 5 minutes, he still doesn't land the plane and explain the differences between...