How does the IRS treat capital gains (and losses) from stock trading? I need a web sight to use as a source.?

Answer 1

Yo Al,

It's pretty simple. If you buy into a position, and then sell any part of the position in less than one year, then this becomes a short term either gain or loss and taxed at a higher rate than a long term trade.
Long term positions/trades are those that you hold on to for at least one year. If you then sell, a taxable event occurs, and you would have a long term capital gain or loss.
If you have a brokerage trading account, then the brokerage company will send you a year end statement detailing all the trading activity. On the back end, the brokerage company also reports this information to the IRS electronically.

Answer 2

Try chapter 16 of IRS Publication 17 and IRS Topic 409 both links are provided.

http://www.irs.gov/pub/irs-pdf/p17.pdf
http://www.irs.gov/taxtopics/tc409.html

Answer 3

http://www.irs.gov/publications/p550/index.html