Not Another Tax Question

Discussion in 'Silver' started by AQ, Oct 18, 2012.

  1. AQ

    AQ New Member

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    Hey All,

    I do understand that if you hold an investment for more than 1 year, you will only be taxed 50% of the profits.

    Now in the case if I have an online trading account i.e GoldMoney, eToro etc. and I do sell any investments before holding for 1 year and make profits and do buy in again without cashing out into my bank account.

    Do I

    1) Report taxes irregardless i've cashed out into my bank account, as long as a sell off+profit has been made
    2) Only report taxes after i've cashed in into my bank account

    Any input will be helpful.

    Cheers,
    AQ
     
    AQ, Oct 18, 2012
    #1
  2. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    No.1 - a sale is a sale, irregardless of whether the money hits your bank account or whether it remains in your trading account. It has to be reported as a profit or loss.

    Love that word too, irregardless of the fact I can't find it in the dictionary. :)
     
    wrcmad, Oct 18, 2012
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  3. AQ

    AQ New Member

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    Cheers for that swift response WrcMad, brains filled with thoughts now to ponder over.
    Time to ditch ur dictionary for google :lol:
     
    AQ, Oct 18, 2012
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  4. eToro Team

    eToro Team New Member

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    Dear AQ,

    While what wrcmd wrote is true, your taxes can also depend on your volume and frequency of trades and whether you qualify for "trader" status with your tax authority. Many of our traders, for example, are day traders, some of whom make tens of trades per hour, in which case it would not make sense to report every tiny profit from every tiny trade they make considering that those profits are immediately re-invested. I advise you to consult the website of your tax authority to learn exactly where you stand.

    Happy trading!
    Andy, eToro Team
     
    eToro Team, Oct 22, 2012
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  5. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Whaaat????
     
    mmm....shiney!, Oct 22, 2012
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  6. eToro Team

    eToro Team New Member

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    If you qualify for trader status, the IRS (this applies to US based traders of course) treats your profits not as capital gains, but as income. Thus, you do not report every gain for every trade, but rather your overall income which is taxed as your salary, not as profits gained from an investment.
     
    eToro Team, Oct 28, 2012
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