When investing what is taxed? the profits or the whole amount invested?

Answer 1

Only profits get taxed, if it's less than $10000.00 proximately 10% will go thorts taxes.
Good Luck!

Answer 2

Just the profit, but, PAY ATTENTION please. If you make a profit in a stock, you must pay the tax this year UNLESS it is in an IRA, in which case you only pay tax when you finally take it out. What that means is that the compound interest really works at full value. If you make 10% a year, it will compound at 10% a year, not 10% less taxes. If you would like to retire richer, then for heavens sakes get an IRA. If you are any good at stocks, set up a "self directed" IRA with any broker in which the investments are in stocks of your choice.

Answer 3

Also if you sell for a capitol loss it becomes a tax deduction. Some people do this to hedge (protect) their portfolios if they have been wanting to sell a losing asset anyways.
When you get your 1099-DIV form in Jan. from your brokerage firm/mutual fund company they will usually have this data in boxes 2A and 4 for you to report on your tax return.

If you are investing in a retirement account (e.g. IRA, ROTH IRA, 401(k), ROTH 401(K), SEP IRA, etc.) you do not pay any taxes on earnings from interest, capital gains, etc. Depending on the account type (and your eligibility) you basically either pay taxes before a contribution or upon a withdrawal.

There are a LOT more tricks in the investing world. Pick up a book on mutual funds or stocks (I read a few of the "For Dummies" series and they were insightful and well written). But if you are worried about taxes and are a long-term position holder open either an IRA or ROTH IRA and forget about taxes for the most part. My $0.02

Answer 4

The profits. If you invested $25,000 in stocks, and sold the stocks for $100,000 in the future, you would be taxed on the gain ($75,000). You would report both the sale proceeds and the cost basis, but the net is what you would pay taxes on.

Answer 5

Capital gains are taxed . Sales price - cost basis . . .
The price you were paid when you sold Minus the price when you bought = capital gain
If you held for more than a year , it is taxed at the lower long term rate .
Less than a year can go up to 28%
If some are a gain and others are a loss , they are all added up for a net gain or loss ,

Read the 1040 instruction book and review schedule D .

http://www.irs.gov/

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Answer 6

Profit is taxed, which is capital gains. And any dividends you collect.