If I sell my stocks and reinvest all the profits into another stock, do I still have to pay taxes on my gains?

Question

I'm a lil confused on how the whole tax thing works when dealing with stock gains. Suppose I buy 100 shares at $5/share....then sell it at $6/share......so now I made $100. But what if I now put all that $600 into another stock? Will I still have to pay taxes on that $100 I made?

Answer 1

Yes.

Answer 2

Yes, unless you can figure out a way to keep the gains on paper. If you can sell a stock and purchase another without physically touching the money (also known as unrealized capital gains), there has not yet been an actual gain, only on paper. The only caveat is that sooner or later, uncle sam will be paid. Talk to the broker you bought the stock from, he/she can further assist you.

Answer 3

What you do with the money makes no difference. If you sell at a gain, yes you pay tax on the gain.

Answer 4

You have to pay capital gains taxes EVERY time you sell. 15% for selling after 1 year of holding stock. Normal income tax rate if selling less than 1 year. Tax laws change every couple years it seems, so be alert to any changes.

Answer 5

Yes. You will still have to pay taxes on the $100 profit. If it is a short-term capital gain (less than 1 year), you will be taxed at your marginal tax rate. If it is a long-term capital gain, you will be taxed at the lesser of the 15% long-term capital gain tax rate or your marginal tax rate.

Answer 6

Yes. Capital gains taxes will be due. There is not, for stocks, anything comparable to the "like kind exchange" rules for real estate and other assets.

Answer 7

Yes you have to pay taxes on capital gains and dividends, unless you hold the money in a tax sheltered account (like an IRA).

Answer 8

What you spend the money on doesn't effect the taxablity of your gains or deductiblity of your losses.
Your new purchase will have a basis of what you paid for it and the commission.