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Originally Posted by tjac  Can anyone fill me in on capital gains tax? Like if I walked away with my virtual earnings right now, about $7,000, what portion would I need to give to the gov't? Does the tax scale up with my returns? |
If you hold an investment for a year or more, you get charged the reduced "long term" capital gains tax, which is 15% (or 5% if your normal income tax is less than 15%, which is just the two lowest brackets I think). If you hold it less than a year, you get taxed as normal income (which is obviously significantly higher). If you buy back a "long term" sale within 30 days, you get charged the "short term" rate instead.
Generally when you sell profitable investments, you also sell some losers that you don't expect to recover anytime soon. That way you mitigate the taxes because your net gains aren't as high. You only get taxed on profits.